- Deplatformed: How Big Tech Companies & Corporate America Subvert The Second Amendment
Deplatformed: How Big Tech Companies & Corporate America Subvert The Second Amendment
Authored by Sam Jacobs via Ammo.com,
Anyone familiar with the Bible is familiar with the Mark of the Beast: Without this mark, no man may buy or sell.
Regardless of one’s religious faith or lack thereof, there is an illustrative case in this biblical story: When one cannot buy or sell, one is metaphorically up the creek. Short of producing everything one needs oneself, buying and selling are necessary parts of virtually every modern person’s life.
In our modern world, we can begin to see a sort of Mark of the Beast: While ideas and even objects aren’t banned, they are increasingly difficult to come by, not due to government fiat, but due to the machinations of corporations hostile to the American values of freedom.
One can be in favor of the free market while recognizing a simple truth: There is no way that America’s Founding Fathers would have sat on their hands while five corporations dominated American discourse and commerce. It is hard to imagine, for example, the Founders suffering a single private bank processing most of the payments in the United States and refusing to do business with gun merchants. Alternately, one can scarcely imagine that the Founders would have sat still for three companies – all of them hostile toward American values and the Constitution – dominating political discourse and deplatforming anyone who opposed them.
This is the situation in which we find ourselves as a nation today: Guns are not illegal, but private companies will make it increasingly difficult to buy, sell or own them – up to and including pulling your bank account. You have all the freedom of speech you like, but prepare to be deplatformed or have your voice buried by large tech corporations with their thumb on the scale of American discourse.
As the American economy has become more corporatist – such that the market is controlled by the interrelation between monolithic mega-corporations, Wall Street and the state – and less capitalistic and dynamic, the American press and economy are now being dominated by forces hostile toward the American public and American values.
No less an authority than James Madison warned Americans that the First Amendment alone was not enough to protect free speech. In Federalist No. 47 and Federalist No. 51, he argued that the separation of powers was necessary to protect free speech by preventing one branch of government from accumulating too much power at the expense of the others and, indeed, the rest of society at large.
This is an important point to remember when considering the First Amendment implications of Big Tech and its war on free speech and gun freedom. The Founding Fathers did not live in a world where a few large corporations had more power than the (incredibly limited and power impoverished) government had, either at the federal or the state level. It’s doubtful that they could have conceived of such a thing.
But they did carefully consider the problem of centralized power as it pertained to the rights enshrined in the Constitution. At the end of the day, the Constitution is just a piece of paper with no ability to enforce itself. What’s more, if the Founders did not address the notion that the private sector could meaningfully and substantially circumvent rights for all Americans, it was simply
Corporate Big Brother: Banks as Gun Control
Who needs to pass gun control laws anymore? The left can simply appeal to payment systems, banks and processors as a method of non-state gun control.
Case in point: Andrew Ross Sorkin’s December 2018 article decrying credit card companies for “financing” mass shootings. As with many arguments from the left, the premise is flawed, but very simple: Because eight out of 13 shootings that killed more than 10 people in the 2010s involved a credit card purchase (though, as always, it is worth asking what counts as a mass shooting and what is being left out of the tally – more on this here), credit card companies have a responsibility to step up and stop allowing their customers to make purchases for firearms using credit cards.
This effectively amounts to a request for banks to begin surveilling the legal economic activity of their customers.
It’s not far-fetched to consider that some mass shootings have been facilitated by credit card purchases. The Orlando nightclub shooter Omar Mateen as well as Aurora theater shooter James Holmes used credit cards to purchase the weapons and ammunition they ultimately used to commit mass murder.
But mass shootings, particularly those not part of urban gang warfare, are incredibly rare, despite the overwhelming amount of media attention paid to them. What’s more, while statistics for such would be difficult to formulate, the vast, overwhelming majority of firearms and ammunition purchases made with credit cards are made by law-abiding citizens for entirely legal purposes. For most Americans, firearms purchases can be a spike in their normal spending for the month. And what of it? The call for credit card companies and other payment processors to monitor the economic activity of law-abiding citizens would cause an outrage if the government were to do it, so why is the American public supposed to sit still for an invasion of their privacy simply because a private company is performing the surveillance?
Anyone who has ever made a firearms purchase knows that the bill can add up quickly. The oft-demonized AR-15 can easily top $4,000 when the price of a scope, rifle case and a decent cache of ammunition are added to the bill. Even a humble handgun purchase can quickly hit over $1,000 when a good holster and ammo are tacked on. This means that millions of Americans purchasing firearms for no reason other than recreation or self defense are going to have their personal finances investigated by a corporate Big Brother, with all the lack of transparency one can expect from a massive bank whose starting premise is “guilty until proven innocent.”
The attempt by the left to get banks to snoop on legal purchases amounts to nothing more than the stigmatization of the exercise of one of the rights enshrined in our Constitution. And while some would argue that the Constitution only limits the government’s actions, it must constantly be asked why we should allow for such an intrusion into our private lives simply because a private company is doing it.
“If you don’t like it, just make your own credit card company.”
Hardly.
Corporate Gun Control and the Mark of the Beast
After the Parkland Shooting, the American media entered into another round of its “something must be done” (read as: your guns must be taken away) propaganda. One result of this was some of the biggest banks in the United States dropping or scaling back their relations with gun manufacturers.
JPMorgan Chase’s Chief Financial Officer Marianne Lake crowed to reporters that the company’s relationship with firearms manufacturers “have come down significantly and are pretty limited.” Bank of America announced its intention to stop extending credit to business clients manufacturing “military-style weapons.” One must, of course, ask if this applies to companies engaged in supplying the United States military itself or the increasingly militarized police found in our nation’s cities.
Bank of America stopped short at stigmatizing the retailers who sell such weapons. Citigroup, however, took the step of requiring any of its business partners to restrict firearms sales to those over the age of 21, as well as those who have not passed a background check. They also barred their partners from selling so-called “high capacity magazines” and bump stocks, which were later banned.
Amalgamated Bank went perhaps the furthest of all, refusing to invest any of its assets in companies involved in the manufacture of “firearms, weaponry and ammunition.”
This leads into another aspect of corporate gun control: Not only is the left demanding that big banks snoop around in your legal purchases, the banks are also starting to make it more difficult for gun manufacturers to obtain the financial services banks would never dare to deny to any other law-abiding company simply on the basis of what they sell.
There is, of course, consumer push-back. For example, the somewhat successful boycott of Dick’s Sporting Goods after it ceased selling so-called “assault weapons.” But Dick’s is still in business and still not selling scary black rifles. And while you can do your business with a competitor, it still doesn’t change the fact that the message has been sent: Companies can remove legal items from their shelves in a politicized fashion with virtually no meaningful consequences.
There is also the growing specter of private companies banning customers from carrying in their stores. Huffington Post compiled a list of seven companies who do not want legal firearms being carried in their businesses. Outback Steakhouse was at the center of a story where a law enforcement officer was asked to leave because he was carrying, something that he is required to do when he is in uniform. Salesforce, a popular software platform for online retailers, will no longer do business with companies who sell virtually all forms of semi-automatic weapons.
Microsoft has put language in its Code of Conduct that prevents users from using them “in any way that promotes or facilitates the sale of ammunition and firearms.” This is another sweeping example of corporate attempts to infringe upon America’s Second Amendment rights. There is nothing illegal or immoral about owning, selling or promoting firearms. Indeed, the right to keep and bear arms is enshrined in the Second Amendment.
This is a form of corporate coercion that shows the limitations of simply relying upon the Constitution and the free market to ensure one’s rights are respected. It’s hard to imagine that the Founders would simply have thrown up their hands and accepted that corporations were making it impossible for them to exercise their rights simply because there was nothing “unconstitutional” about it.
Beyond this, however, there are two rather frightening developments.
The first is several liberal state governments skinning the cat from the other end. Rather than making it difficult or impossible to purchase firearms, they are going after the National Rifle Association. While many well-meaning people in the Second Amendment movement consider the NRA to be weak tea (and not without good reason), the fact remains that the NRA is the most public and prominent opponent of gun grabbers. The fall of the NRA at the hands of gun grabbers (as opposed to more principled pro-Second Amendment groups) would spell disaster for gun rights in America, setting a precedent that would be used against other organizations protecting gun freedom.
The State of New York, led by Andrew Cuomo, has started attacking insurance programs offered by the NRA to its members. He has also attempted to threaten every insurer and bank in the state to not do business with the NRA. It is important to remember that the banking industry is largely centered in New York, meaning that the governor of that state has an outsized influence on how banking is done across the nation.
Another chilling example of corporate coercion goes beyond the Second Amendment and into the First: Popular veteran rights and gun blog “No Lawyers, Only Guns and Money” was removed from Blogger, a blogging platform owned by Google, on the grounds that it “promoted or sold regulated items.” The website was later restored with the explanation that it was removed by an automated system.
PayPal, the biggest payment processing system on the Internet, cannot be used for any exercise of your Second Amendment rights, nor to pay for dissident thinkers’ services such as Stefan Molyneux and Alex Jones or even Wikileaks. One is not obligated to support or defend the beliefs of any of these people or groups to see that a dangerous precedent is being set.
However, these are neither the first nor the only times that Big Tech has attempted to censor conservatives, libertarians, pro-gun freedom forces and others with opinions to the right of John McCain. Some have argued, not without solid evidence, that Big Tech is involved in a full-throttle war against conservatives and free speech on the Internet. We’re inclined to agree.
Big Tech’s War on Free Speech
There is a war against free speech and Big Tech is the one waging it. Congress has looked into this, with Sen. Ted Cruz of Texas leading the charge, not allowing Facebook and other Big Tech companies to weasel out of answering hard questions that the public has about censorship on the Internet.
It’s less true to say that Facebook, Google and other Big Tech platforms “lean left” than it is to say that they push a globalist, neoliberal, corporatist line that eschews any sort of values or ethics other than growth. Edward Abbey has said that the philosophy of growth for the sake of growth is also the philosophy of the cancer cell.
The Big Tech war against free speech is nothing new and there have been canaries in the coal mine for years. Everyone remembers MILO being shown the door on Twitter for a dubious accusation that he led a mob against actress Leslie Jones. But the real test case was not him, it was hacker and troll Andrew Auernheimer, commonly known by his handle “weev.”
weev (always lowercase) is difficult to defend because he has unpopular viewpoints. To wit, he has a large swastika tattooed on his chest. However, proponents of the First Amendment and free speech shouldn’t be concerned with what weev thinks or says, because what he thinks or says is irrelevant to whether or not he has the right to think it and say it. But Twitter and other Big Tech platforms were smart in choosing such an ideological pariah to test the waters.
There is a direct line to be drawn from the deplatforming of weev on Twitter to the unpersoning of Alex Jones to the shadow banning and outright deplatforming of conservative voices all across the web. Mainstream, establishment conservatives have done themselves a disservice by attempting to defend themselves against deplatforming on the basis that “I’m not a Nazi” for two reasons.
First, it doesn’t matter if you’re a Nazi or not. All legal speech should be allowed on social media, or else Big Tech is an editorial content curator, which makes it liable for anything that is posted on there. This means that your ex-spouse lying about how you missed Little Timmy’s baseball game on Facebook can be construed as defamation, for which Facebook is liable because they didn’t remove the status update. Facebook’s pretense that it is a content-neutral platform, a claim that is patently false, is what protects it from being sued every time someone lies about someone else on the platform or from being hauled into court every time that ISIS uses WhatsApp to coordinate an attack.
But the other reason is that for many on the left, there is not a tangible difference between weev, MILO, Alex Jones, Michelle Malkin, Ann Coulter, Wayne LaPierre, Ted Cruz, Ben Sharpiro or the President of the United States. Anyone to the right of John McCain is seen as either a literal fascist, a fascist apologist, or a gatekeeper who opens the door to fascist ideology.
Big Tech will not stop at deplatforming actual, self-avowed fascists, nor will it stop at conspiracy theorists, edgy conservatives, or even “respectable” centrist types like Dave Rubin. To throw the far right under the bus in the hopes of satisfying Big Tech’s blood lust is a strategic mistake – it legitimizes the entire process of deplatforming, which will eventually swallow up anyone who believes in the Constitution and the rule of law. Big Tech and the left either see no difference between you and a Nazi, or pretend not to because it’s politically expedient.
This is doubly important because of how many Big Tech companies are actively spying on their users. The EFF maintains an annual detailed list of who is telling the government about its users and their data, who informs users that the government is sniffing around about them, and who even bothers to disclose their data retention policies.
What this means is that if and when the federal government begins compiling a list of “potential right-wing terrorists” or “right-wing extremists” (to the extent that they do not already maintain such lists), they will have a ready-made mine of data from Big Tech, who have shown themselves to be more than willing to cooperate with the federal government, with minimal or no arm-twisting on the part of the feds. Take, for example, the Philadelphia synagogue shooter. Self-proclaimed “free speech” platform Gab was more than willing to hand over all the data they had about his account to the feds without even being asked.
Sure, no one wants to be in the position of defending a synagogue shooter. But the point is that these platforms, even the ones who allegedly have your back, have shown themselves willing to roll on their users provided enough of a fever is whipped up in the press.
Conservatives Censored on Social Media
It’s worth showing just how many mainstream, run-of-the-mill conservatives have been censored by Big Tech – it’s not just the MILOs and the weevs of the world who are being shown the door. Indeed, we believe that these types are censored not out of any actual desire to suppress so-called “hate speech,” but instead to act as a test case for setting the precedent for suppressing legal speech. Here are some examples that are worth considering:
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Pastor Rich Penkoski: This pastor runs a popular Facebook page, “Warriors for Christ.” He was suspended mid-sermon for criticizing the rainbow flag. He was previously banned for calling an atheist a liar and sharing verses from the Quran that called for the killing of non-Muslims.
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Over Two Dozen Catholic Pages: In July 2017, Facebook banned several Catholic pages with millions of followers. Most were based in Brazil. Facebook removed the pages without explanation.
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Rep. Marsha Blackburn: Not even elected officials are immune from social media deplatforming. Facebook removed an ad for Tennessee Rep. Marsha Blackburn’s campaign that attacked pro-abortion group Planned Parenthood.
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Alveda King: Facebook removed paid ads from Martin Luther King’s niece Alveda King for her documentary on Roe v. Wade.
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Ryan T. Anderson: Twitter refused to run several ads from Christian radio stations for an upcoming interview with Ryan T. Anderson. Anderson is a critic of transgenderism and radical gender ideology.
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Robert Spencer: The head of JihadWatch.org, a website covering radical Islam, was removed from social media and even had his credit cards canceled. He also claims that Google buries him in results for searches about “jihad.”
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Brian Fisher: The President of the Human Coalition notes that this anti-abortion group has had prayer apps removed from the Apple store and has had its content repeatedly removed from Twitter despite taking pains to ensure that all of it is within Twitter’s narrow, anti-First Amendment guidelines.
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PragerU: PragerU is very much the picture of mainstream, run-of-the-mill, completely non-edgy conservatism on the Internet. Despite this, they repeatedly have their content removed from YouTube. Dennis Prager, head of PragerU, is suing YouTube. He notes that Delta Air Lines couldn’t say “conservatives can’t fly with us,” but YouTube, ostensibly a neutral platform, is effectively allowed to say that conservatives can’t use their services.
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David Kyle Foster: David Kyle Foster is a leader in the “ex-gay” movement, a group of Christians who claim that their religion has “cured” their homosexuality. His Vimeo channel, featuring over 700 personal testimonials, was pulled from Vimeo for being “hateful.”
Even the Declaration of Independence has been removed from Facebook as “hate speech” due to their “filtering program.” Yes, really. Nor is it only conservative groups who have been targeted. Moderates and leftists who don’t toe the party line – like Andy Ngo, Tim Pool and Michael Tracey – have likewise been targeted by deplatforming and shadowbanning.
Deplatforming is not limited to social media. Chase Bank has been accused of depriving conservative voices of banking services. This returns us to the Mark of the Beast notion: What good is free speech if banks – banks – can keep you from receiving payments. And how far off are we from seeing conservative voices deprived of their ability to pay?
Imagine showing up at the grocery store and finding out that your money’s no good because you have a concealed carry permit. Sound far-fetched? So would have having your bank account closed for being a conservative activist.
Quis Custodiet Ipsos Custodes? i.e., Who Watches the Watchers?
Of course, it’s important to ask for a list of left-wing groups who have been banned from social media. But somehow, left-wing groups – even those who violate the terms of service, such as several accounts dedicated to doxing right-wing accounts and inciting violence against conservatives, libertarians and others on the right – are allowed to operate with impunity.
Indeed, it is worth asking who decides what is against the rules at Facebook, Twitter, etc. There is an answer to this question:
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For Twitter, it’s a “Trust and Safety Council” comprised of 12 left-wing groups and one conservative group you’ve probably never heard of: The Network of Enlightened Women. The 12 left-wing groups include the Anti-Defamation League and GLAAD, both of whom have labeled mainstream conservative groups as “hate groups.”
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For Facebook, they rely upon a “fact-checking” process that leverages Snopes and PolitiFact as impartial “fact checkers.”
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YouTube uses the ADL and the Southern Poverty Law Center, both left-wing groups known for their attacks on mainstream conservative organizations. Facebook, for its part, deleted 57 of over 200 “hate groups” demanded by the SPLC in August 2017.
What Is To Be Done?
The question after reading this becomes: What should be done, if anything?
It’s difficult to imagine a situation where government interference in Big Tech is going to have the desired outcome. The result might be more and greater censorship than existed before. However, it is worth noting that Sen. Ted Cruz, not exactly known as a proponent of Big Government, has been at the forefront of attempts to hold Big Tech accountable for its censorship of conservative voices on the Internet.
But it’s quite possible that new laws and regulations are not required. What is instead required is a more rigorous enforcement of the laws and regulations that are already on the books. To wit: Are Facebook, Twitter and YouTube content-neutral platforms or are they editorial platforms? If the former, then it would seem that their case for being able to censor legal speech on their platforms is legally flimsy. If the latter, then they are responsible for everything posted on their platforms by every user. Similarly, if Google is intentionally manipulating its results to yield a politicized result, that is likely in violation of existing telecommunications statutes.
The American shift from capitalism to corporatism has had dire unintended consequences: Power has coalesced in both Washington, D.C. and many tech and media companies, such that the latter can undermine American rights and manipulate American political opinion with impunity, while the former abdicates its oath to defend the U.S. Constitution against all enemies, both foreign and domestic.
Tyler Durden
Tue, 02/04/2020 – 23:45 -
- Trump Ups Nuclear Ante With 'Mini-Nukes' Deployed On Subs To "Deter Russia"
Trump Ups Nuclear Ante With ‘Mini-Nukes’ Deployed On Subs To “Deter Russia”
The United States has added a ‘low yield’ nuclear weapon to its submarine arsenal in a controversial first in decades, after the Trump administration called for its deployment as part of the 2018 Nuclear Posture Review in order to “deter Russia”.
“Moscow, the argument goes, might have miscalculated that the United States was unwilling to use its nuclear weapons in response to a Russian low-yield nuclear strike because the existing U.S. weapons were too powerful,” The Hill reports.
Undersecretary of Defense for Policy John Rood acknowledged in a statement that “The U.S. Navy has fielded the W76-2 low-yield submarine-launched ballistic missile (SLBM) warhead.”
Submarine launched ballistic missile, file image. “This supplemental capability strengthens deterrence and provides the United States a prompt, more survivable low-yield strategic weapon; supports our commitment to extended deterrence; and demonstrates to potential adversaries that there is no advantage to limited nuclear employment because the United States can credibly and decisively respond to any threat scenario,” he added.
Some Congressional Democrats have argued that the warhead, which is less powerful than the Hiroshima bomb, alarmingly lowers the threshold whereby the US would be willing the deploy a nuclear warhead against an enemy. Critics also see that the W76-2 is redundant given the current arsenal of lower-yield air-launched nuclear weapons.
The Pentagon, however, says such a deterrent which is not as powerful as America’s standard nukes but still has major destructive capability nonetheless, is crucial for dissuading enemies like Russia from engaging in limited nuclear conflict. US officials have underscored that such weapons will only be used in “extraordinary circumstances”. Advocates in the administration have also said the W76-2 launched from a submarine can more reliably penetrate air defenses compared to the more usual airplane launch.
Rood explained further in his statement: “In the 2018 Nuclear Posture Review, the department identified the requirement to ‘modify a small number of submarine-launched ballistic missile warheads’ to address the conclusion that potential adversaries, like Russia, believe that employment of low-yield nuclear weapons will give them an advantage over the United States and its allies and partners,” according to The Hill.
Ohio-class submarine file image, via the National Review. Experts generally cited in multiple media reports suggest the ‘low-yield’ nukes’ destructive power may be about 5-kilotons, which is about one-third the power of the bomb dropped in Hiroshima, Japan at the end of WWII.
The Federation of American Scientists first reported last week they believe the W76-2 to currently be on the USS Tennessee Ohio-class ballistic missile submarine, which has been patrolling the Atlantic Ocean since the close of 2019. It’s believed to have been fitted atop Trident ballistic missiles on other among the Navy’s Ohio-class submarines as well.
A years-long push by activists has also sought to prevent broader deployment of low yield nukes in America’s arsenal. They see it as a dramatic step which makes nuclear escalation more likely and rapid.
Co-founder of a nuclear arms reduction group named Global Zero, Bruce Blair, himself a former Air Force nuclear weapons officer, said, “But we must not delude ourselves into thinking lower-yield nukes are more usable in a conflict,” because it remains that “Any use of this sea-based weapon – either first or second – will risk stoking the flames of conflict and escalating to all-out nuclear war.”
“A wiser response to an enemy’s use of one or two low-yield nukes would be to refrain from nuclear escalation while unleashing America’s ferocious and decisive conventional juggernaut,” Blair added.
Tyler Durden
Tue, 02/04/2020 – 23:25 - Van Buren: Dems Don't Realize How Much Impeachment Hurts Them
Van Buren: Dems Don’t Realize How Much Impeachment Hurts Them
Authored by Peter van Buren via The Strategic Culture Foundation,
We are watching the pathetic ending to one of the most pathetic periods in American politics. All the smoking guns have been firing blanks.
Following one of the most childish tantrums of denial ever recorded, Democrats set about destroying the Trump presidency in its crib; a WaPo headline from January 20, 2017 – Inauguration Day itself – exclaimed “The Campaign to Impeach President Trump has Begun.” The opening gambit was going to be Emoluments, including rent paid by the Industrial & Commercial Bank of China for its space in Trump Tower in New York.
After three years, it looks like that attempt finally reached its end game, failure, one gray afternoon. On Friday the Senate brought impeachment proceedings to their effective conclusion, declaring the witnesses already called before the House were to be the last. The formal vote to acquit Trump is scheduled as an anti-climax for Wednesday.
It has been ugly and mean. Using the entire apparatus of the American intelligence community, operating fully outside the law, Democrats declared the President of the United States a Russian spy. They forced gentlemen to explain to their elderly mothers what a pee tape was. We had to hear over dinner about Trump’s sexual peccadilloes and look deeper into Stormy Daniel’s cleavage than our own political souls. They made expedient heroes out of small, dishonest men like Michael Avenatti, John Brennan, and James Comey for perceived political gain.
Shame on you, Democrats.
When Russiagate collapsed they plunged deeper, with a setup “crime” driven by a faux whistleblower, supported by State Department gossips and not much more. Look at the series of plays attempted within this Hail Mary of a Hail Mary. Back in August the manufactured worry was that Trump—by messing with Ukrainian aid—was a threat to national security that would send the Red Army rolling west. Then there was the continued attempt to link up two created memes—Trump’s help from the Russians in 2016 and Trump’s help from the Ukrainians in 2020 as part of some whole to damage democracy. At the end it was to be about how not allowing additional witnesses chosen by leaks to the NYT would distort the 2020 election. One reporter called acquittal “the worst day for America since the Civil War.” We had to listen to another round of democracy dying, existential threats, end of the Republic, as repetitive as summer Top 40.
The House chose not to wait out a special prosecutor, or even subpoena witnesses back in the fall. The cries today about no witnesses in fact ignores how the House called 17 witnesses in their own impeachment, not a single one of which had first-hand knowledge of the events unless we were willing to believe some State Department Obama fan-boy magically overheard both sides of a cell phone conversation. If they had a real case a special prosecutor could have sorted through Parnas and Hunter and Bolton, with subpoenas if necessary, and warrants could have shown us exactly what was said in those calls. But that would have come up weaker than Mueller and the Democrats knew it.
You don’t think voters see they were played — again? As with Brett Kavanaugh, when things seemed darkest, the Democrats produced a witness that appeared to turn everything around. Back then Christine Blasey Ford was the deus ex machina. Same with John Bolton and his “manuscript” (shall we call it a dossier?) and instead of dealing with it months ago in a calm fashion, The New York Times drops the leak right into the middle of the impeachment punch bowl so it could create its own sense of urgency saying we can’t wait for thoughtful deliberation or even a court ruling, we must do something right away.
So really, in the end this game-changer was supposed to be lifelong conservative John Bolton ratting out a Republican administration? That was how you were going to get Trump? Only a week earlier it was going to be Ukrainian grifter Lev Parnas. Before him was it “fixer” Michael Cohen, or Paul “Fredo” Manafort, who was going to flip? Was it taxes or the 25th Amendment which was once upon a time going to be the final blow?
Do you think voters won’t remember it was Adam Schiff who failed in Russiagate, issuing his infamous Schiff Memo defending as legal the FISA court surveillance of Carter Page now shown to be unconstitutional? The same Schiff who worked with the “whistleblower” to shape the impeachment narrative and then buried the whistleblower from scrutiny? History will remember Schiff poorly, and judge those who put their party’s future in his dirty hands, Nancy, equally poorly.
As it will Elizabeth Warren, who submitted a “question” at the impeachment proceedings which asked if the proceedings themselves “contribute to the loss of legitimacy of the chief justice, the Supreme Court, and the Constitution?” Nancy Pelosi picked up the theme saying the president will not be exonerated after the Senate acquits because “You cannot be acquitted if you don’t have a trial. And you don’t have a trial if you don’t have witnesses and documentation,” echoing the insanity of saying a victory in the Electoral College isn’t really being elected president. Do Democrats think the Super Bowl victory went to the team with the most yards rushing, or the one with the most points scored?
Impeachment failed in the Senate, ultimately, because it was phony. Senators are politicians, with their noses always in the wind. They sniffed not a modicum of support for this impeachment, and saw nothing akin to the evidence that would encourage them to return to their constituents and explain their contrary votes as they did confronted, overwhelmingly, with Nixon’s wrongdoings.
It’s really over now. Our democracy, which you regularly declare so in peril, will be forced to hold an election of all things to determine its next president.
Democrats, you led your supporters off a cliff. While you create false excuses for losing in 2016, they watched Republicans confirm judge after judge. As they listened in their sleep to you bark about diversity, they woke up to see mostly a handful of old, white men to lead the party into the election.
You lied to them repeatedly about Russia and Ukraine and what a danger Trump is. You continue to try to convince people a strong economy is an illusion and cheer on a recession. You continue to paint an inaccurate picture of a society with gun nuts, Nazis, and white supremacists on the march. You convinced a generation of young voters they are fundamentally unhappy, awash in racism, homophobia, and misogyny, and when they just can’t see it the way you do, you corrupted movies and TV with dorm room level political piety to insist that is how it is out there.
Now, instead of respecting one another at work and school, they tip-toe around as wanna-be defendants looking for targets to sue or complain to HR about. Describe yourself in one word? Offended.
Would you trust the nation to the people the Democratic party has become? Because that is the question Democrats have thrust into the minds of voters. As they have said many times, this was always more about America than it was about Trump.
Tyler Durden
Tue, 02/04/2020 – 23:05 - "They Conjure Stories From Thin Air" – Former 'Junk Bond King' Slams "Mendacious" New York Times
“They Conjure Stories From Thin Air” – Former ‘Junk Bond King’ Slams “Mendacious” New York Times
Ray Dalio isn’t the only American billionaire railing against the mendacious American press.
Another legendary financier (and ex-con) Michael Milken, who has reinvented himself as a major philanthropist over the last three decades, took to the commentary pages of the Wall Street Journal on Monday (ironically, the paper with which Dalio is feuding) to rail against America’s ertswhile paper of record, the New York Times.
During the editorial, Milken asserts that the New York Times essentially libeled him in a story published late last year, rendering him collateral damage in the Grey Lady’s war on President Trump’s ‘opportunity zones’ initiative that was passed as part of the 2017 tax reform plan.
Milken
The NYT newsroom, as Milken correctly asserts in his editorial, has adopted a stance that’s clearly hostile to the policy, which offers incentives for private capital to invest in economically-adverse communities (instead of the direct government assistance often favored by liberals like the editors of the NYT).
At some point, the paper figured out that it could “conjure a news story virtually out of thin air” if it could link Treasury Secretary Steven Mnuchin with investors in a tract of land impacted by the ‘opportunity zones’ program.
Basically, investors in property within an opportunity zone can receive valuable tax benefits for development that might have already been in the works, or at least that’s how the NYT has chosen to spin it.
The policy is obviously intended to incentivize developers to build things like affordable housing by making it easier for them to do so profitably (typically, by offering the tax breaks mentioned above). But the NYT claims the program is essentially a giveaway to big developers and friends of the administration, despite not having any evidence linking boogeymen like Milken to insiders like Mnuchin.
The specific story to which Milken is referring transformed coincidences into nefarious conspiracies. The slant is obvious from the headline: “Symbol of 80s Greed Stands To Profit From Trump Tax Break For Poor Areas.”
Basically, the only fact in this story is that Milken is an investor in a tract of land covered by an opportunity zone in California. As Milken notes, many other much more high-profile investors are also involved (many of them tech giants like Microsoft). These companies spend billions on lobbying every year. Yet, Milken gets the blame for influencing the legislation to his benefit, via a tenuous connection to Mnuchin. The only vaguely incriminating detail is that Mnuchin intervened in the process of shaping the policy at all. And he could have had a million reasons for doing so.
Despite deploying a team of six reporters to work on the story for months, they couldn’t find anything definitively linking Milken to Mnuchin and the opportunity zone legislation. So they went with the slightly attenuated angle crystalized in the story’s headline: Yes, Milken may have stood to profit from this investment (which represents just a sliver of his overall portfolio). But as far as we know, it’s not illegal to make money in America – at least not yet.
Apparently I fit the bill, and the paper deployed six reporters and researchers for several months looking for dirt. They didn’t find any—I did none of the things they hinted at. But the editors weren’t about to let an absence of facts kill a breathless front-page exposé about how I and other investors stood to “Profit From Trump Tax Break for Poor Areas.” The Times claimed, wrongly, that the Treasury secretary directed regulatory changes for my benefit. Not only did he not make the changes for my benefit, the changes didn’t benefit me. The article reached false conclusions by claiming that mere coincidences proved intent, or by conflating events that occurred months apart in a dizzying feat of obfuscation. This ignored the public record of what really happened.
This is irresponsible journalism. The Times, which sometimes seems to exist in an alternate universe, knew before publication that important conclusions and implications in the article about me were wrong because we and the U.S. Treasury gave them every relevant fact. I’ve never spoken to Mr. Mnuchin, any other government official or anyone else about putting TRIC in an opportunity zone; I have never authorized anyone to act for me on that matter and no one has ever asked me to take any action related to it; I had no knowledge of any lobbying to put TRIC in an opportunity zone.
We gave the Times these and many other facts. They, and anyone with an internet connection, could have easily found the truth. I asked my lawyers to do just that by retaining someone to go online and figure out the real story from the public record. In three days this person found a deep trove of facts that the Times’s six reporters had apparently chosen to ignore. Anyone who wants to know the truth can find an article telling the real story plus a fact sheet and timeline at www.mikemilken.com. These documents provide a sobering antidote to the errors, omissions, deceptions and bias in the Times article.
The Times has now sent my office new questions that suggest another article is in the works. I will vigorously counter any further journalistic mendacity with hard facts and, where appropriate, other actions. But the greater risk is that no one is safe when a previously respected news organization deploys its considerable resources to twist the truth. Keep that in mind as you read future articles attacking opportunities for upward mobility through job creation.
Milken referred to an earlier screed against the NYT written by FedEx founder Fred Smith to help articulate exactly what the paper did that was so dishonest.
As Fred Smith, founder and CEO of FedEx, wrote in these pages in November, the Times attacked his company by “printing selected facts, connecting unrelated events, and implying nefarious activities when there were none whatever.” That’s exactly what the Times did to me last fall in a long article about Nevada real estate investments. Mr. Smith’s complaint centered on provisions of the 2017 Tax Cuts and Jobs Act and its benefits to FedEx that the Times asserted were unfair.
Now, Milken says the Times is gearing up to write another story exposing imagined skullduggery. He’s decided to fight back, by publishing his side of the story online.
We’re curious to see how the paper and its editors will react to Milken’s decision to try and ‘correct the record’ on his own.
Tyler Durden
Tue, 02/04/2020 – 22:45 - Pelosi Tears Up Trump's State Of The Union Speech After Handshake Snub
Pelosi Tears Up Trump’s State Of The Union Speech After Handshake Snub
Update: And here is Pelosi’s response. Stay classy San Francisco.
WATCH: At the end of President Trump’s State of the Union address, House Speaker Nancy Pelosi tears up her copy of the speech. #SOTU pic.twitter.com/sDEkNBD0DW
— PBS NewsHour (@NewsHour) February 5, 2020
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When asked afterwards “Why did you tear up the speech?”
Pelosi responded:
“Because it was the courteous thing to do… It was the courteous thing to do considering the alternative.”
One can only wonder what the alternative was.
* * *
One year after Nancy Pelosi’s famous SOTU 2019 handclap…
Do not lose Nancy Pelosi’s point. She is clapping back at Trump for his call to an end to “revenge politics.” pic.twitter.com/tZNCFGkjq8
— Hillary Warned Us About Caucuses (@HillaryWarnedUs) February 6, 2019
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… and one failed impeachment later, Trump returned the favor and snubbed Pelosi’s handshake as he took the stage at today’s SOTU address.
House Speaker Nancy Pelosi is snubbed by Pres. Trump when she reaches out to shake his hand.pic.twitter.com/isM0R5zkvv
— Alex Salvi (@alexsalvinews) February 5, 2020
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Pelosi, as expected, snubbed Trump right back, introducing him only as “The President of the United States”, whereas traditionally the speaker has used the language: “I have the high privilege and distinct honor of presenting to you the President of the United States.”
Still, Trump will have the final laugh: in less than 24 hours the Senate will vote to acquit Trump of the impeachment farce passed by Pelosi’s House a few weeks ago, a process Pelosi herself did not want to pursue afraid that it would backfire and cripple the chances of the establishment’s favorite candidate, Joe Biden, but was ultimately was forced to concede by the radical left-wing in the Democratic party.
In retrospect, she should have gone with her gut feeling.
— Richard Nixon (@NixonRumpusRoom) February 5, 2020
Tyler Durden
Tue, 02/04/2020 – 22:31 - Prelude To A Crisis
Prelude To A Crisis
Authored by John Mauldin via Everggreen Gavekal blog,
“The Federal Reserve is running the risk of fomenting an eventual financial crisis by easing banking regulations at the same time that it’s cut interest rates…say some former Fed officials, including ex-Vice Chairman Alan Blinder and financial stability experts Daniel Tarullo and Nellie Liang.”
– Bloomberg article on December 17th, 2019
Ignoring problems rarely solves them. You need to deal with them—not just the effects, but the underlying causes, or else they usually get worse. The older you get, the more you know that is true in almost every area of life.
In the developed world and especially the US, and even in China, our economic challenges are rapidly approaching that point. Things that would have been easily fixed a decade ago, or even five years ago, will soon be unsolvable by conventional means.
There is almost no willingness to face our top problems, specifically our rising debt. The economic challenges we face can’t continue, which is why I expect the Great Reset, a kind of worldwide do-over. It’s not the best choice but we are slowly ruling out all others.
Last week I talked about the political side of this. Our embrace of either crony capitalism or welfare statism is going to end very badly. Ideological positions have hardened to the point that compromise seems impossible.
Central bankers are politicians, in a sense, and in some ways far more powerful and dangerous than the elected ones. Some recent events provide a glimpse of where they’re taking us.
Hint: It’s nowhere good. And when you combine it with the fiscal shenanigans, it’s far worse.
Simple Conceit
Central banks weren’t always as responsibly irresponsible, as my friend Paul McCulley would say, as they are today. Walter Bagehot, one of the early editors of The Economist, wrote what came to be called Bagehot’s Dictum for central banks: As the lender of last resort, during a financial or liquidity crisis, the central bank should lend freely, at a high interest rate, on good securities.
The Federal Reserve came about as a theoretical antidote to even-worse occasional panics and bank failures. Clearly, it had a spotty record through 1945, as there were many mistakes made in the ‘20s and especially the ‘30s. The loose monetary policy coupled with fiscal incontinence of the ‘70s gave us an inflationary crisis. Paul Volcker’s recent passing (RIP) reminds us of perhaps the Fed’s finest hour, stamping out the inflation that threatened the livelihood of millions. However, Volcker had to do that only because of past mistakes.
Recently, reader Mourad Rahmanov, who has thought-provoking (and sometimes lengthy) reactions to almost every letter, kindly sent me some of his personal favorite John Mauldin quotes. One was this passage which succinctly captures my feelings about the Fed. (Context: This was part of my response to Ray Dalio’s comments on Modern Monetary Theory.)
Beginning with Greenspan, we have now had 30+ years of ever-looser monetary policy accompanied by lower rates. This created a series of asset bubbles whose demises wreaked economic havoc. Artificially low rates created the housing bubble, exacerbated by regulatory failure and reinforced by a morally bankrupt financial system.
And with the system completely aflame, we asked the arsonist to put out the fire, with very few observers acknowledging the irony. Yes, we did indeed need the Federal Reserve to provide liquidity during the initial crisis. But after that, the Fed kept rates too low for too long, reinforcing the wealth and income disparities and creating new bubbles we will have to deal with in the not-too-distant future.
This wasn’t a “beautiful deleveraging” as you call it. It was the ugly creation of bubbles and misallocation of capital. The Fed shouldn’t have blown these bubbles in the first place.
The simple conceit that 12 men and women sitting around the table can decide the most important price in the world (short-term interest rates) better than the market itself is beginning to wear thin. Keeping rates too low for too long in the current cycle brought massive capital misallocation. It resulted in the financialization of a significant part of the business world, in the US and elsewhere. The rules now reward management, not for generating revenue, but to drive up the price of the share price, thus making their options and stock grants more valuable.
Coordinated monetary policy is the problem, not the solution. And while I have little hope for change in that regard, I have no hope that monetary policy will rescue us from the next crisis.
Let me amplify that last line: Not only is there no hope monetary policy will save us from the next crisis, it will help cause the next crisis. The process has already begun.
Radical Actions
In September of 2019, something still unexplained (at least to my satisfaction, although I know many analysts who believe they know the reasons) happened in the “repo” short-term financing market. Liquidity dried up, interest rates spiked, and the Fed stepped in to save the day. I wrote about it at the time in Decoding the Fed.
Story over? No. The Fed has had to keep saving the day, every day, since then.
We hear different theories. The most frightening one is that the repo market itself is actually fine, but a bank is wobbly and the billions in daily liquidity are preventing its collapse. Who might it be? I have been told, by well-connected sources, that it could be a mid-sized Japanese bank. I was dubious because it would be hard to keep such a thing hidden for months. But then this week, Bloomberg reported some Japanese banks, badly hurt by the BOJ’s negative rate policy, have turned to riskier debt to survive. So, perhaps it’s fair to wonder.
Whatever the cause, the situation doesn’t seem to be improving. On Dec. 12 a New York Fed statement said its trading desk would increase its repo operations around year-end “to ensure that the supply of reserves remains ample and to mitigate the risk of money market pressures.”
Notice at the link how the NY Fed describes its plans. The desk will offer “at least” $150 billion here and “at least” $75 billion there. That’s not how debt normally works. Lenders give borrowers a credit limit, not a credit guarantee plus an implied promise of more. The US doesn’t (yet) have negative rates but the Fed is giving banks negative credit limits. In a very precise violation of Bagehot’s Dictum.
We have also just finished a decade of the loosest monetary policy in American history, the partial tightening cycle notwithstanding. Something is very wrong if banks still don’t have enough reserves to keep markets liquid. Part of it may be that regulations outside the Fed’s control prevent banks from using their reserves as needed. But that doesn’t explain why it suddenly became a problem in September, necessitating radical action that continues today.
Here’s the official line, from minutes of the unscheduled Oct. 4 meeting at which the FOMC approved the operation.
Staff analysis and market commentary suggested that many factors contributed to the funding stresses that emerged in mid-September. In particular, financial institutions’ internal risk limits and balance sheet costs may have slowed the distribution of liquidity across the system at a time when reserves had dropped sharply and Treasury issuance was elevated.
So the Fed blames “internal risk limits and balance sheet costs” at banks. What are these risks and costs they were unwilling to accept, and why? We still don’t know. There are lots of theories. Some even make sense. Whatever the reason, it was severe enough to make the committee agree to both repo operations and the purchase of $20 billion a month in Treasury securities and another $20 billion in agencies. They insist the latter isn’t QE but it sure walks and quacks like a QE duck. So, I and many others call it QE4.
As we learned with previous QE rounds, exiting is hard. Remember that 2013 “Taper Tantrum?” Ben Bernanke’s mild hint that asset purchases might not continue forever infuriated a liquidity-addicted Wall Street. The Fed needed a couple more years to start draining the pool, and then did so in the stupidest possible way by both raising rates and selling assets at the same time. (I don’t feel good saying I told you so but, well, I did.)
Having said that, I have to note the Fed has few good choices. As mistakes compound over time, it must pick the least-bad alternative. But with each such decision, the future options grow even worse. So eventually instead of picking the least-bad, they will have to pick the least-disastrous one. That point is drawing closer.
Ballooning Balance Sheet
Underlying all this is an elephant in the room: the rapidly expanding federal debt. Each annual deficit raises the total debt and forces the Treasury to issue more debt, in hopes someone will buy it.
The US government ran a $343 billion deficit in the first two months of fiscal 2020 (October and November) and the 12-month budget deficit again surpassed $1 trillion. Federal spending rose 7% from a year earlier while tax receipts grew only 3%.
No problem, some say, we owe it to ourselves, and anyway people will always buy Uncle Sam’s debt. That is unfortunately not true. The foreign buyers on whom we have long depended are turning away, as Peter Boockvar noted this week.
Foreign selling of US notes and bonds continued in October by a net $16.7b. This brings the year-to-date selling to $99b with much driven by liquidations from the Chinese and Japanese. It was back in 2011 and 2012 when in each year foreigners bought over $400b worth. Thus, it is domestically where we are now financing our ever-increasing budget deficits.
The Fed now has also become a big part of the monetization process via its purchases of T-bills which also drives banks into buying notes. The Fed’s balance sheet is now $335b higher than it was in September at $4.095 trillion. Again, however the Fed wants to define what it’s doing, market participants view this as QE4 with all the asset price inflation that comes along with QE programs.
It will be real interesting to see what happens in 2020 to the repo market when the Fed tries to end its injections and how markets respond when its balance sheet stops increasing in size. It’s so easy to get involved and so difficult to leave.
Declining foreign purchases are, in part, a consequence of the trade war. The dollars China and Japan use to buy our T-bills are the same dollars we pay them for our imported goods. But interest and exchange rates also matter. With rates negative or lower than ours in most of the developed world, the US had been the best parking place.
But in the last year, other central banks started looking for a NIRP (Evergreen note: Negative Interest Rate Policy) exit. Higher rate expectations elsewhere combined with stable or falling US rates give foreign buyers—who must also pay for currency hedges—less incentive to buy US debt. If you live in a foreign country and have a particular need for its local currency, an extra 1% in yield isn’t worth the risk of losing even more in the exchange rate.
I know some think China or other countries are opting out of the US Treasury market for political reasons, but it’s simply business. The math just doesn’t work. Especially given the fact that President Trump is explicitly saying he wants the dollar to weaken and interest rates go even lower. If you are in country X, why would you do that trade? You might if you’re in a country like Argentina or Venezuela where the currency is toast anyway. But Europe? Japan? China? The rest of the developed world? It’s a coin toss.
The Fed began cutting rates in July. Funding pressures emerged weeks later. Coincidence? I suspect not. Many factors are at work here, but it sure looks like, through QE4 and other activities, the Fed is taking the first steps toward monetizing our debt. If so, many more steps are ahead because the debt is only going to get worse.
As you can see from the Gavekal chart below, the Fed is well on its way to reversing that 2018 “quantitative tightening.”
Louis Gave wrote a brilliant essay recently (behind their pay wall, but perhaps he will make it more public) considering four possible reasons for the present valuation dichotomies. I’ll quote the first one because I believe it is right on target:
The Fed’s balance sheet expansion is only temporary.
The argument: The Fed’s current liquidity injection program is not a genuine effort at quantitative easing by the US central bank. Instead, it is merely a short-term liquidity program to ensure that markets—and especially the repo markets—continue to operate smoothly. In about 15 weeks’ time, the Fed will stop injecting liquidity into the system. As a result, the market is already looking through the current liquidity injections to the time when the Fed goes “cold turkey” once again. This explains why bond yields are not rising more, why the US dollar isn’t falling faster, and so on.
My take: This is a distinct possibility. But then, as Milton Friedman used to say: “Nothing is so permanent as a temporary government program.” The question here is: Why did the repo markets freeze in mid- to late September? Was it just a technical glitch? Or did the spike in short rates reflect the fact that the appetite of the US private sector and foreign investors for short-dated US government debt has reached its limit? In short, did the repo market reach its “wafer-thin mint” moment?
If it was a technical glitch, then the Fed will indeed be able to “back off” come the spring. However, if, as I believe, the repo market was not the trouble, but merely a symptom of a bigger problem—excessive growth in US budget deficits—then it is hard to see how, six months before a US election, the Fed will be able to climb back out of the full-on US government monetization rabbit hole in which it is now fully immersed.
In this scenario, the markets will come to an interesting crossroads around the Ides of March. At that point, the Fed will have to take one of two paths:
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The Fed does indeed stop its “non-QE QE” program. In this scenario, US and global equities are likely to take a nasty spill. In an election year, that will trigger a Twitterstorm of epic proportions from the US president.
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The Fed confirms that the six-month “temporary” liquidity injection program is to be extended for another “temporary” six months. At this point bond yields everywhere around the world will shoot up, the US dollar will likely take a nasty spill, global equities will outperform US equities, and value will outperform growth, etc.
Looking at the US government’s debt dynamics, I believe the second option is much more likely. And it is all the more probable since triggering a significant equity pull-back a few months before the US presidential election could threaten the Fed’s independence. Still, the first option does remain a possibility, which may well help to explain the market’s cautious positioning despite today’s coordinated fiscal and monetary policies (ex-China).
Just this week Congress passed, and President Trump signed, massive spending bills to avoid a government shutdown. There was a silver lining; both parties made concessions in areas each considers important. Republicans got a lot more to spend on defense and Democrats got all sorts of social spending. That kind of compromise once happened all the time but has been rare lately. Maybe this is a sign the gridlock is breaking. But if so, their cooperation still led to higher spending and more debt.
As long as this continues—as it almost certainly will, for a long time—the Fed will find it near-impossible to return to normal policy. The balance sheet will keep ballooning as they throw manufactured money at the problem, because it is all they know how to do and/or it’s all Congress will let them do.
Nor will there be any refuge overseas. The NIRP countries will remain stuck in their own traps, unable to raise rates and unable to collect enough tax revenue to cover the promises made to their citizens. It won’t be pretty, anywhere on the globe.
Luke Gromen of Forest for the Trees is one of my favorite macro thinkers. Like Louis Gave, he thinks the monetization plan will get more obvious in early 2020.
Those that believe that the Fed will begin undoing what it has done since September after the year-end “turn” are either going to be proven right or they are going to be proven wrong in Q1 2020. We strongly believe they will be proven wrong. If/when they are, the FFTT view that the Fed is “committed” to financing US deficits with its balance sheet may go from a fringe view to the mainstream.
Both parties in Congress are committed to more spending. No matter who is in the White House, they will encourage the Federal Reserve to engage in more quantitative easing so the deficit spending can continue and even grow.
As I have often noted, the next recession, whenever it happens, will bring a $2 trillion+ deficit, meaning a $40+ trillion dollar national debt by the end of the decade, at least $20 trillion of which will be on the Fed’s balance sheet. (My side bet is that in 2030 we will look back and see that I was an optimist.)
My 2020 forecast issue, which you’ll see after the holiday break, I’m planning to call “The Decade of Living Dangerously.” Sometime in the middle to late 2020s we will see a Great Reset that profoundly changes everything you know about money and investing.
Crisis isn’t simply coming. We are already in the early stages of it. I think we will look back at late 2019 as the beginning. This period will be rough but survivable if we prepare now. In fact, it will bring lots of exciting opportunities. More on that in coming letters.
Tyler Durden
Tue, 02/04/2020 – 22:25 -
- Russian Evacuees From China To Be Quarantined In Remote Siberian Region
Russian Evacuees From China To Be Quarantined In Remote Siberian Region
The Russian Air Force on orders from President Vladimir Putin is currently in the midst of evacuating some over 150 Russian nationals from China and sending them to be “monitored” for coronavirus symptoms in a region of Western Siberia.
“Russian citizens and people from other countries evacuated from China will be temporarily accommodated in the Tyumen Region where they will be placed under quarantine, Russian Deputy Prime Minister Tatyana Golikova told reporters on Tuesday,” official news agency TASS reports.
Image source: Russian Defense Ministry/TASS This also after the first two cases of coronavirus in Russia were confirmed last Friday. Two Chinese nationals have already been quarantined in Tyumen and the far eastern Zabaykalsky region, and are expected to recover.
Tyumen Region is in Western Siberia, and was among the first regions of the harsh and remote eastern areas of Russia to be settled starting in the 16th century. During pre-revolutionary Russia and into Soviet times, the region historically served as a place of exile, including as part of the gulag system of labor camps in the north.
Some 147 people will be flown by the Russian Air Force from Wuhan and Hubei Province to the Tyumen area where they are expected to be monitored by medical authorities for at least 14 days.
“We are preparing ourselves for a possible wide spread of the infection,” Deputy Health Minister Sergei Krayevoy said, according to the Interfax news agency.
…Two Russian military planes were due to help evacuate 130 Russians stranded at the epicentre of the outbreak in China’s Hubei province, officials said. — Reuters
Russian authorities over the weekend restricted direct flights to China and shut the massive land border with China, which extends for 2,600 miles, which will no doubt have significant economic impact for both countries, given China remains Russia’s largest and most important trading partner.
Makeshift testing and quarantine zone for the novel coronavirus at Myeongdong shopping district in Seoul, South Korea. Getty Images. “Our citizens as well as citizens of the Eurasian Economic Union and Ukraine will be accommodated in the Tyumen Region as the best prepared region where they will be placed under quarantine,” Deputy Prime Minister Golikova said in her statement Tuesday.
She indicated further that an evacuee list is still being finalized between the foreign ministry, the Russian Embassy in China, and the Chinese government.
On Monday, Russia’s Federal Service for Supervision of Consumer Rights Protection and Human Well-Being (Rospotrebnadzor) revealed that more than 4,000 total people who had contacts with suspected coronavirus infected individuals remain under medical supervision in Russia.
“Since December 31, Rospotrebnadzor examined 29,651 flights, and 1,627,142 people, discovered 379 people with diseases, who previously were in China for 14 days. Currently, more than 4,000 people who contacted with suspected coronavirus patients remain under medical supervision,” an official statement from the health agency said.
Tyler Durden
Tue, 02/04/2020 – 22:05 - Unraveling California's Quick, But Complete Demise
Unraveling California’s Quick, But Complete Demise
Authored by Joe Guzzardi via Patch.com,
Through incredibly good fortune, I’ve been unable to watch the tedious impeachment trial. I’m traveling and my destinations don’t have television. I can’t report having the same luck, however, with the daily immigration news. Bulletins pour into my email inbox, and since immigration has been my journalism beat for more than 30 years, I’m professionally obligated to keep current. The news is relentlessly dreary, and reflects how far from the rule of law California has drifted.
In its story “This Immigration Lawyer Understands Her Clients; She’s Undocumented,” the Los Angeles Times was almost giddy over illegal alien Lizbeth Mateo and her representation before the Executive Office for Immigration Review (EOIR) of a fellow illegal alien. Let that sink in: an illegal alien lawyer defending an illegal alien in a U.S. Court. According to a former legacy Immigration and Naturalization employee, no one can serve as an attorney or be a member of the state bar if they are criminals – Mateo entered and reentered the United States illegally. Nor are they eligible to represent an alien before the EOIR since their immigration status conflicts with the laws at issue.
Instead of focusing its story on the absurdity and legal questionability of an illegal immigrant subject to immigration laws, including arrest and deportation, representing another illegal immigrant, the Times instead referred to Mateo as “polished, savvy” which may be true but is also incomplete.
Mateo is certainly savvy. Several years ago, she and eight other activists, known collectively as the The Dream 9, traveled to Mexico, then demanded and received reentry permission so they could protest what they perceived as President Obama’s harsh immigration policy.
That California would be the epicenter of such an outrageous immigration failure surprises no one. In 2013, as it began its slide into the depths of incomprehensible catering and entitlement-dole-out to unlawfully present migrants, then-Gov. Jerry Brown signed AB 1024, legislation that allowed illegal aliens who passed the California bar to receive law licenses.
During the same week, Brown also approved state-issued drivers licenses for aliens. A boastful Brown said, “While Washington waffles on immigration, California’s forging ahead, I’m not waiting.” One year later, Brown signed more expansive legislation that ordered the 40 licensing boards which the California Department of Consumer Affairs recognizes to, by 2016, accept applications regardless of immigration status. To replace the previously required Social Security number on all professional license applications, aliens could substitute the easily acquired federal Individual Taxpayer Identification Number.
Brown was correct, but not in the way he imagined, when he called Washington an immigration waffler. In the nearly seven years that have passed since Brown signed AB 1024, Congress has done little to end the privileges like driving, sanctuary city protection, and access to lower in-state university education fees that states and counties have awarded to illegal immigrants. As a California native and long-time immigration analyst, the question I’m most often asked is: What happened to the Golden State? In recent memory, California was a conservative bastion under U.S. Sen. Richard Nixon, and Governors Ronald Reagan and Pete Wilson.
But then, as president, Reagan went rogue and signed the Immigration Reform and Control Act of 1986. During the ensuing years, tens of thousands of legal and illegal immigrants arrived.
The legal immigrants and their children who came of age in the late 1990s and early 2000s favor higher immigration levels, self-define as Democrats and vote accordingly.
Among the illegal alien contingent that came to California, many have remained, and some have received amnesty and therefore voting rights. They too support immigration expansion.
Today in California, as the EOIR example proves, federal immigration laws are meaningless. If they’re willing to objectively study California’s immigration history, other states could learn an important lesson. Too much identity politics accelerates great states’ declines and fall. In about a half-century, California went from being America’s most coveted destination to today’s societal mess from which residents with options can’t flee fast enough.
Tyler Durden
Tue, 02/04/2020 – 21:45 - Huffington Post Investigation Exposes Rampant Sexism At The Washington Post
Huffington Post Investigation Exposes Rampant Sexism At The Washington Post
The fury of twitter blue checkmarks over the Washington Post’s decision to suspend female reporter Felicia Sonmez has manifested in a #MeToo-style hit piece directed at the Washington Post.
In a laughable piece by reporter Emily Peck, the Huffington Post relies on anonymously sourced quotes and evidence-free assertions from ‘staffers and contractors’ bashing the paper for unspecified indiscretions like valuing ‘male characteristics’ over ‘female characteristics’, without ever describing or explaining what they mean.
The piece begins by describing two recent scenarios where reporters received ‘death threats’. The backlash to Sonmez’s tasteless tweet about a nearly two-decade-old retracted rape allegation against Kobe Bryant in the wake of his untimely and extremely brutal passing, and an incident involving national security reporter Shane Harris.
Sonmez was suspended, and offered no protection. Harris received protection within 72 hours.
Now, were either of these reporters truly in danger? Probably not.
Both male and female journalists receive death threats and abuse constantly online, and there are zero reported incidents of reporters being murdered in the US by angry twitter followers. But from this one incident, Huffpo extrapolates an entire culture of misogyny, a culture that, according to many in the WaPo newsroom, doesn’t actually exist.
HuffPo cited data from the WaPo union suggesting that the pay gap between men and women at the Post has narrowed in recent years, though, thanks to a larger number of men in senior positions, the median pay for men is still skewed slightly higher than the median pay for women. But rather than explain what these numbers actually mean, HuffPo simply points to the discrepancy and asserts that it’s evidence of a ‘gender pay gap’ attributable solely to latent sexism.
The Washington Post doesn’t value women and men in the same way, these people said. This appears literally true when it comes to pay: Women in the newsroom are paid less than men, according to a report published last year by the union that represents employees. (The paper disputed the findings at the time.) One former Post contractor told HuffPost she was let go after asking for a raise.
The disparity courses through the culture and is borne out in the paper’s coverage, where stories of sexual harassment have sometimes been held to a higher standard than other coverage, some staffers said.
Crucially, the gender imbalance is clear in the masthead. Three of the four top editors at the Post are men. Only four of 17 department heads are women.
“The place is run by men and it creates a particular atmosphere and assigns a higher value to certain male characteristics,” said one female reporter. “I’ve been a victim of it in a broad way, as most women in the newsroom have.”
Is the paper really “run by men”? Not really. HuffPo dings WaPo for only having four women among 17 section heads without mentioning that this is much higher than the average for the industry, and most industries. Many of the top editors have female deputies – and, critically, more than half of WaPos newsroom consists of female reporters.
It’s not that The Washington Post doesn’t have high-profile women, staffers emphasized to HuffPost. There are star female reporters at the paper. Indeed, a majority of the newsroom staff — approximately 800 employees — is female, just like the U.S. workforce generally.
That’s actually not true. According to the Department of Labor, only 47% of the US workforce is comprised of women. Overall participation rates by gender are higher for men than for women. We suspect HuffPo got the labor force confused with the American academic landscape: As the Atlantic boldly declared a few years ago, “men are the new minority on college campuses”.
WaPo’s newsroom is actually disproportionately made up of women. If we were to adjust that for average participation rates per gender, it would suggest that management has actually discriminated against men in order to satisfy gender-warrior critics and present more solid optics.
Finally, HuffPo’s final example of misogyny involves a contractor who was allegedly ‘fired for asking for a raise’. But based solely off HuffPo’s account of the incident, it appears more likely that her position wasn’t renewed because of cutbacks at her bureau, and her strongly expressed dissatisfaction with her current position. A junior contract employee complaining to their boss’s boss about compensation isn’t really appropriate, and likely came across as ungrateful. We suspect her demeanor and conduct had something to do with her contract not being renewed – and that’s totally appropriate.
The situation can be worse for female contract reporters, who aren’t on staff yet but often put in full-time hours, particularly in foreign bureaus.
One former contractor, a woman assigned to an outpost overseas, told HuffPost that she had been fired after asking for a pay increase.
She first broached the subject in July at a breakfast meeting with her boss’s boss, foreign editor Doug Jehl, the woman told HuffPost, declining to be named for fear of career reprisals. She had just recently thrown her hat in the ring for a promotion to a staff position.
As a contractor, relative to her male counterparts, she was underpaid, she told Jehl, citing a conversation with the Post’s union. The subject set him off.
“It was like a red flag to a bull. He got angry. He raised his voice,” she said. He told her she’d have to leave the paper if she brought up the issue again, she recalled him saying.
The next morning, sitting at a Starbucks, Jehl said her contract would not be renewed after it expired at the end of the year. “‘You want more money and job security and we can’t give that to you,’” she recalled him saying.
She decided to take up matters with leadership a few months later in September, writing an email to Martin Baron, the executive editor of the paper. HuffPost reviewed the exchange. She described how much she liked working for the Post and how disappointed she was in the way her situation was handled.
Instead of accepting this, the contract reporter once again went around her boss’s boss’s head to complain to Marty Baron, the WaPo Executive Editor, directly. He assured her that the elimination of her position had nothing to do with her complaints, and that the paper would give her a glowing recommendation to any prospective employers. Yet this too was spun as an example of ‘sexism.’
She decided to take up matters with leadership a few months later in September, writing an email to Martin Baron, the executive editor of the paper. HuffPost reviewed the exchange. She described how much she liked working for the Post and how disappointed she was in the way her situation was handled.
“I don’t believe the way I’ve been treated reflects the values you espouse or aspire to for the Post,” she wrote.
She provided Baron with an outline of what happened:
When I asked him for a raise, he told me to look for a job in another company. Mine wasn’t a demand. It was a statement of my own perceived value to the company and as a reporter.
My sense is that you expect journalists to stand up for themselves and act professionally. I felt I did both. The next day, Doug told me my [job] application was not being considered, and my contract was not being renewed. I spoke to [managing editor] Tracy Grant about this on the same day, and she told me I could leave immediately and still get my salary through the end of the contract if I wished.
In his response, Baron said they were sticking to their decision to let her go, stating that it was part of a rethink of the entire bureau. He acknowledged the circumstances of her dismissal only slightly. “I’m disappointed to hear that you believe the changes in the bureau have not been handled properly,” he wrote. “We will have nothing other than positive things to say about you to any potential future employers.”
We look forward to watching WaPo, HuffPo, Buzzfeed, CNN and the rest of the #resistance media eat each other alive with accusations of imagined sexism.
Tyler Durden
Tue, 02/04/2020 – 21:25 - An 'Orwelexicon' For Bias And Dysfunction In Psychology And Academia
An ‘Orwelexicon’ For Bias And Dysfunction In Psychology And Academia
Authored by Lee Jussim via Quillette.com,
In this essay, I introduce a slew of neologisms – new words – to capture the tone and substance of much discourse, rhetoric, dysfunction, and bias in academia and psychology. It’s partly inspired by an article entitled ‘Lexicon for Gender Bias in Academia and Medicine’ by Drs Choo and May in the British Medical Journal (BMJ), although that one was coming at this from a different perspective.
They argued that “mansplaining” was just the “tip of the iceberg” and so coined terms such as “Himpediment,” defined as a “man who stands in the way of progress of women.”
Adminomania: A delusion that increased administrative and bureaucratic intrusions into people’s lives will actually improve something, fueled primarily by a pervasive blindness to unintended negative side effects. See Title IX.
Athletic gynocide: The elimination from sports competitions of people identified at birth by doctors or other adults as female because they cannot successfully compete with people identified at birth by doctors or other adults as males but who identify as females.
Bias bias: A bias for seeing biases, often manifesting as either claiming bias when none exists, exaggerating biases that do exist, or overgeneralizing to large swaths of life from studies finding bias in some narrow or specific context.
Biomindophobia: Fear that biology influences the mind.
Blancofemophobia: Prejudice against white women, as exemplified by dismissing the beliefs, attitudes, or behaviors of white women with phrases such as, “White women white womening.” See here for a real-world example.
Brexistential fear: An irrational fear that Brexit will lead to the end of the world as we know it.
Brophobia: Fear of men having a conversation among themselves.
Chapeaurougeauphobia: Fear and loathing of Trump supporters.
Cisandrophobia: Fear of and prejudice against heterosexual men.
Decontextaphilia: An unhealthy attraction to quoting others out of context.
Emotional imperialism: The strange belief that your feelings should dictate someone else’s behavior.
Epistemological impugnment: A form of intellectual bullying that involves declaring or implying that a claim should not be believed, not on the basis of logic or evidence showing it to be false, but by tainting the source with real or imagined failings in some other area. This often manifests as unsubstantiated allegations and guilt-by-association.
Equalitarianism: A dogmatic, quasi-religious belief that all groups are equal on all traits that matter, usually accompanied by the belief that the only credible source of group differences is discrimination and outrage at anyone who suggests otherwise. Often accompanied by the belief that women and minorities are inherently or essentially more virtuous.
Europhobia: Fear of Europeans and prejudice against Europeans, their descendants, and practices and ideas that originated in Europe.
Evopsychophobia: Fear of evolutionary psychology, especially of the possibility that social groups (such as men and women) might have evolved different psychological traits and behavioral tendencies.
Genetophobia: Fear of genetic explanations for human behaviors, competencies, traits, and preferences. Often manifests as blank slatism and environmental determinism.
Heterophobia: Fear of and prejudice against heterosexual men and women.
Identity colonialism: The assumption that you have a better grasp of what’s harmful to a marginalized group than members of that group.
Implicit ESP delusions: People afflicted by these delusions believe they can read others’ minds. This belief is not explicitly articulated because it would sound silly if it was. How, then, can it be diagnosed? These delusions often manifest as accusations that someone else is “disingenuous,” or insincere; also, that the accuser knows someone’s “real” motivations.
IQaphobia: Fear of measuring intelligence because one believes that only Nazis and eugenicists do that.
Istaphobia: Fear of being called an “ist” (racist, sexist, fascist, etc.), usually followed by self-censorship.
Kafkatrap: A rhetorical move whereby protesting your innocence is interpreted as proving your guilt. Example: If you deny that you are a racist, you are a racist.
Marxism denialist: Someone who conveniently ignores or forgets that Marxism/communism has been a brutal disaster whenever it has achieved national hegemony, or argues “it was not real Marxism,” or dismisses the relevance of that brutal history. These symptoms are usually accompanied by camouflaging Marxist ideas/ideology in social science neologisms e.g., “system justification theory.”
Nazinoia: A delusional tendency to see Nazis as hiding behind ideas or practices one opposes, and by accusing anyone to the right of Bernie Sanders of being Nazis, fascists, white supremacists, or alt-right.
Occam’s shoehorn: What you use to fit the data to your narrative, no matter how difficult.
Occam’s trumpet: Ignoring all possible alternatives to “bias” as explanations for inequality and triumphantly proclaiming that bias is pervasive.
Phobophobia: Fear of being called a “phobe” (Islamaphobe, trans-phobe, etc.). Usually followed by self-censorship.
Phrenological Reflux Disease: This disease is characterized by an inability to digest scientific work on group differences, especially common with respect to intelligence without intermittent ejaculations of “phrenology!” or “phrenologist!”
Quackademic: A person in academia who should not be allowed around students.
Racebsion: An excessive, persistent, and disturbing assumption that race is at the center of everything. See the New York Times’s 1619 Project.
Reductio ad Hitlerum: Attributing ideas and arguments one opposes to Nazism, fascism, or white supremacy. Also known as Godwin’s Law.
Subjectiphilia: An infatuation with subjective experience as empirically triumphant, e.g., using “lived experience” as if it could end an argument.
Triggeritis inexplicablus: Outbursts and meltdowns in response to reading or hearing certain unwelcome words or ideas.
Trollusions: A pathological tendency to see those who bluntly disagree with you as trolls.
Trumpcession: An intellectually debilitating condition, common among academics, characterized by attributing all bad things to Trump and Trump supporters.
Twitterphobia deficientus: Not worrying quite enough about how other people might perceive what you tweet.
Twokademia: Academic grievance grandstanding on Twitter.
Undo Process: Reckless disregard for due process protections for those accused of demographic-related violations, e.g., harassment, bias, discrimination.
Wokademia: Academic grievance grandstanding.
Wokanniblism: A low-carb, high-protein diet consisting mainly of eating your own.
* * *
Lee Jussim is a professor of social psychology at Rutgers University and was a fellow and consulting scholar at the Center for Advanced Study in the Behavioral Sciences at Stanford University (2013-15). He can be followed on Twitter @PsychRabble
Tyler Durden
Tue, 02/04/2020 – 21:05 - Elizabeth Warren Tries Disappearing Act After Being Caught Exiting Private Jet
Elizabeth Warren Tries Disappearing Act After Being Caught Exiting Private Jet
Native-American? Woman of the people? Billionaire-bludgeoner? Climate-change alarmist?
It would appear, by the looks of this latest clip catching Senator Elizabeth Warren exiting a private jet, that not everything she says is true (allegedly)!
By far the most entertaining part of the brief video is her camera-evasion techniques once she realizes she is being filmed, finding refuge behind one of her staff…
Well we know at least one person who is going to be very disappointed in you lizzy…
— GrantB911 (@GrantB911) February 4, 2020
https://platform.twitter.com/widgets.js
But the hypocrisy goes even deeper. As Fox News reports, Warren, who funds her trips with campaign cash, tweeted as recently as last Thursday about Trump administration officials using private aviation on the taxpayer’s dime. She specifically referenced former Trump Health and Human Services Secretary Tom Price, who still owes the U.S. government over $300,000 in travel expenses, according to an Inspector General report.
Between June and September, Warren paid over $150,000 to “Advanced Aviation,” a private jet charter service, according to FEC filings. Last week the Washington Examiner reported she had spent over $700,000 total on private aviation.
Tyler Durden
Tue, 02/04/2020 – 20:55 - Watch Live: Trump Delivers Third State Of The Union Address
Watch Live: Trump Delivers Third State Of The Union Address
With Democrats on the back-foot following the twin catastrophes of the Iowa Caucus and their unsuccessful push to call John Bolton as a witness in Trump’s Senate impeachment trial, which is expected to end Wednesday with a resounding acquittal and Trump’s approval rating at record highs.
With stocks near record highs and all of Trump’s geopolitical rivals on the back foot, this will be the first SOTU for Trump that won’t be overshadowed by government shutdown-related shenanigans or the Russia collusion narrative.
It’s also important because it’s the last SOTU of Trump’s first term. Trump never really stopped campaigning, though he officially launched the 2020 campaign with a major speech in Florida last year. With a second term hanging in the balance, expect Trump to luxuriate in his rivals’ many mistakes and unforced errors.
Tuesday night’s speech is only Trump’s third state of the union, since the big speech he delivered after inauguration day back in 2017 wasn’t technically a state of the union.
The address starts at 9 pm ET. Readers can watch it live below:
Since the gist of the speech is typically leaked to the press before Trump starts speaking, online betting markets are focused on the length of Trump’s speech, as well as the number of times he’ll say certain words, like “China” or “Democrat”.
Here’s a roundup of SOTU-related Over/Unders, courtesy of Sports Betting Dime.
A few years ago, researchers at the Constitution Center put together this ‘State of the Union’ bingo board the reflects topics reliably mentioned by both Republican and Democratic candidates.
While Democrats like to complain about President Trump’s frequent errors of grammar and spelling, the grade-reading level of the (typically) annual address has declined in recent decades, a trend that started long before President Trump rode that Trump Tower escalator to glory.
If you’re curious about what to expect, the Hill has a primer on five topics to watch, including China, impeachment, his message to Democrats and any big new legislative proposals (Trump will reportedly call on Congress to support previously announced policy plans, possibly including his long-awaited ‘bipartisan’ infrastructure bill, though White House advisors have been tight-lipped this year about what’s going into the speech).
Tyler Durden
Tue, 02/04/2020 – 20:45 - Former Co-Head Of Investment Banking At Goldman Asia Banned For Life By The Fed
Former Co-Head Of Investment Banking At Goldman Asia Banned For Life By The Fed
Former Goldman Sachs partner Andrea Vella has been barred from the industry over his involvement in the Malaysian investment fund scandal known as 1Malaysia Development Berhad (1MDB), a press release from the Federal Reserve said Tuesday.
Vella, a former the Goldman Sachs’ co-head of investment banking for Asia Pacific, was placed on leave in 2018 after he neglected to tell compliance about illicit activity in 1MDB bond offerings conducted by the bank in 2012 and 2013.
“Goldman arranged bond offerings in 2012 and 2013 for 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned development and investment company. The consent order states that Vella failed to escalate Low Taek Jho’s involvement in the bond offerings. Low was a person of known concern to Goldman, and his involvement indicated heightened potential underwriting risks.
Low and two former Goldman employees, Tim Leissner and Roger Ng, have been criminally charged by the Department of Justice for participating in a scheme to divert proceeds of the bond offerings from 1MDB for their personal benefit and bribing certain government officials in Malaysia and Abu Dhabi,” the press release stated.
Bloomberg noted that Vella was able to negotiate with the Fed to leave the industry without admitting or denying wrongdoing.
A Goldman spokesperson said Vella exited the firm several days ago.
The Fed’s release noted Vella was barred from the industry and “fined $1.42 million for his role in the scheme to divert bond proceeds.”
Goldman continues to negotiate with the Department of Justice on a settlement for its role in the 1MDB scheme, where Low had siphoned over $4.5 billion from the state-owned wealth fund from 2009 to 2015.
And what we have here is another example of how a top Goldman banker gets a slap on the wrist for one of the biggest frauds in history. Nevertheless, it also shows how these bankers were given mega deals thanks to kickbacks.
Tyler Durden
Tue, 02/04/2020 – 20:25 - "Made In China" Economic Hit Coming Right Up
“Made In China” Economic Hit Coming Right Up
Authored by Mike Shedlock via MishTalk,
Economic contagion due to the coronavirus is underway. Hyundai halted production. Sony, Apple, and Ford issued warnings.
If you can’t get parts, you can’t build cars.
And due to a coronavirus-related manufacturing halt in China, Hyundai to Shut Down Some Production.
Hyundai, the world’s fifth-largest carmaker, announced Tuesday that it was suspending production lines at its car factories in South Korea, one of the first major manufacturers to face severe supply-chain issues because of the coronavirus.
Many auto plants in China have already shut down because of the virus, including factories run by Hyundai, Tesla, Ford and Nissan. Hyundai plants in South Korea would be the first to shut down lines outside of China, and comes as Hyundai has ramped up production in China over the past two decades.
Economic Contagion
The Wall Street Journal comments on China’s Economic Contagion
More than 20,000 coronavirus cases have been confirmed worldwide—an eight-fold increase over the last week—and experts say hundreds of thousands may not yet have been diagnosed. Two dozen or so countries have reported cases, and many have restricted travel from China to limit the contagion. Companies are evacuating employees from China.
U.S. manufacturers such as Ford, Apple and Tesla have temporarily halted production. One-sixth of Apple sales and nearly half of chip-maker Qualcomm’s revenues come from China. So do 80% of active ingredients used by drug-makers to produce finished medicines. Because China is the world’s largest manufacturer and an enormous consumer market, the economic freeze will disrupt supply chains and reduce corporate earnings.
China’s GDP growth was already almost certainly lower than the official figure of 6%, and it is likely to fall by a third or more.
It’s probably too much to ask Mr. Trump to lift his tariffs on Chinese exports, though it would help. At the very least he could give Beijing more latitude to meet its promise to buy $200 billion more in U.S. products over the next two years. The last thing the President should want when campaigning for re-election is an economic pandemic.
Coronavirus Menace
The New York Times reports SARS Stung the Global Economy. The Coronavirus Is a Greater Menace.
Apple, Starbucks and Ikea have temporarily closed stores in China. Shopping malls are deserted, threatening sales of Nike sneakers, Under Armour clothing and McDonald’s hamburgers. Factories making cars for General Motors and Toyota are delaying production as they wait for workers to return from the Lunar New Year holiday, which has been extended by the government to halt the spread of the virus. International airlines, including American, Delta, United, Lufthansa and British Airways, have canceled flights to China.
Companies Warn On Impact
MarketWatch discusses the Earnings Impact.
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Wynn Resorts Ltd. has among the highest China exposure, as the company derived about 75% of total revenue from Macau over the last 12 months, according to estimates based on FactSet’s proprietary algorithm.
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Sony Corp. CFO Hiroki Totoki, said the fallout from the coronavirus slowdown on the company’s manufacturing, sales and supply chain operations could wipe out its revised guidance for 2019.
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BP said current demand for the year is between 300,000 and 500,000 barrels a day, not the 1.2 million it had anticipated for the year. “There is no question coronavirus, I suspect, will impact demand this year,” a BP executive told investors.
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Jewelry retailer Pandora said it’s already struggling in China in 2020 but the virus is presenting other threats. “China is currently also challenged by the coronavirus that have left streets empty and forced store closures,” Pandora CEO Alexander Laxik said. “China is the biggest jewelry market in the world and we’re not going to walk away from this.”
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Royal Caribbean Cruises Ltd. estimated that cruise cancellations and itinerary modifications as a result of the coronavirus will have a 25-cents-per-share impact on earnings. The company has already canceled eight cruises out of China.
Known Disruptions
Major disruptions include Ford, Apple, Tesla, Qualcomm, Hyundai, Wynn resorts, Sony, BP, Pandora, Royal Caribbean, GM, Toyota, Nike, all the airlines, and many drug makers.
If it’s “Made in China” there will be an economic hit.
This is on top of the Trump-sponsored manufacturing slowdown. Trump’s steel tariffs have started a Rolling Cascade of Downstream Pain
Freight shipments have collapsed: Cass Year-Over-Year Freight Index Sinks to a 12-Year Low
And GDP Internals show business investment contraction: Ignore the Headline, Real GDP is Much Worse Than It Looks
So forget about Trump’s Trade War Ceasefire with China. All that did was halt escalations.
Due to the coronavirus China cannot possibly honor commitments. And it’s highly doubtful they could have or would have anyway.
Tyler Durden
Tue, 02/04/2020 – 20:05 -
- Macy's To Cut 2,000 Jobs And Shutter 125 Stores Amid "Significant Structural Change"
Macy’s To Cut 2,000 Jobs And Shutter 125 Stores Amid “Significant Structural Change”
Macy’s announced Tuesday that it had adopted a three-year plan designed to stabilize profits and continue company growth. The new plan calls for a radical $1.5 billion cost-cutting program that will axe upwards of 2,000 jobs and shutter 125 stores across the US.
The retailer, which operates 680 stores under the Macy’s and Bloomingdale’s brands, said the closure represents an 18% reduction in its brick and mortar footprint. The layoffs of about 2,000 corporate jobs will account for 9% of its workforce. There’s also a plan to close several offices.
Macy’s said the cost savings would generate about $600 million in 2020 and $1.5 billion annually by 2022.
“We are taking the organization through significant structural change to lower costs, bring teams closer together, and reduce duplicative work. This will be a tough week for our team as we say goodbye to great colleagues and good friends. The changes we are making are deep and impact every area of the business, but they are necessary. I know we will come out of this transition stronger, more agile, and better fit to compete in today’s retail environment,” Macy’s CEO Jeff Gennette said in a statement.
Gennette said the company’s “least productive” stores would be cut first. There are already 30 stores in the process of closing, he added.
Under the consolidation program, Macy’s NYC will become the company’s sole corporate headquarters. Offices in San Francisco, Cincinnati, and Lorain, Ohio, will be closed within the next three years.
“We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams,” Gennette said. “Over the past three years, we have shown we can grow the top-line; however, we have significant work to do to improve the bottom-line. We are confident the strategy we are announcing today will allow us to stabilize the margin in 2020 and set the foundation for sustainable, profitable growth.”
The retailer will be testing smaller storefronts called Market by Macy’s and concentrate more on e-commerce.
Amazon’s blowout Q4 earnings highlights how it has forever changed the retail industry, as legacy retailing giants have been reduced to nothing more than a fraction of their size in a decade.
Over 9,000 retail department stores closed their doors last year. With 2020 underway, Macy’s latest cost-saving ploy suggests the retail apocalypse will drag on.
Tyler Durden
Tue, 02/04/2020 – 19:45 - Irrational Fears Of Deflation
Irrational Fears Of Deflation
Authored by Alasdair Macelod via GoldMonmey.com,
The benefits of a deflation of prices brought about by a combination of sound money and markets free from government intervention have been demonstrated to be the best economic environment, the denial of which in favour of inflationary financing has led to repeated monetary and systemic failures.
This article explains how this has come about and puts the record on deflation straight. The development of macroeconomic theory had to deny the benefits of a deflation of prices, unbelievably telling us we need higher prices to stimulate our consumption.
Deflation and investment funded by savings is a far better, natural economic environment than the false gods of easy debt and money printing. There can be no return to the stability of gentle price deflation without seismic shifts in economic thinking and government responsibilities.
Introduction
Talk to any macroeconomist and he will tell you his greatest fear is deflation. He or she may have read Irving Fisher’s account of how in the 1930s deflation forced banks to liquidate loans by selling collateral into falling markets, driving asset prices lower still, accelerating further selling, undermining collateral prices even more, forcing banks to liquidate yet more collateral, driving prices lower still…
Deflation cannot be permitted, for fear of it developing into a self-feeding maelstrom. And to just to make sure, we must have inflation running at a positive 2%, and any dip below is a cause for concern. But is this actually true?
The answer is to be found in the vested interests in a modern economy. Today, critics of deflation are believers in intervention as a means of preserving jobs, convinced that the cause of failure is irrational free markets. Before interventionism took hold, economic failures were associated with cycles of bank credit. In those times, roughly before the early 1920s, deflation was widely understood to be a natural cleansing of past excesses, since they were always preceded by undue optimism and overt speculation. In England, Overend Gurney moved from the staid discount market into mismatching short-term finance into longer maturities, lending into the rail boom before collapsing in 1866. The failure of the City of Glasgow Bank in 1878, followed by Barings in 1890 established a twelve-year cycle of bank credit at that time. We may care to note that it is now twelve years since the Lehman crisis, giving a certain urgency to the current situation.
Banks have never been properly held to account for credit inflation and always resisted attempts to be so. Consequently, addressing the true cause of periodic deflationary slumps has always been ruled out. That left picking up the pieces after a credit-induced boom morphs into catastrophe as the only practical solution. And of course, this bailing out in the so-called public interest was what banks increasingly lobbied for, particularly in America.
The last cleansing deflation in the old-fashioned sense followed the First World War: in America it was brutal but short. It was the last time the US government refused to interfere, the gold standard at $20.67 to the ounce remained intact, and the roaring twenties ensued. But at the end of that decade, President Hoover had a different, hands-on approach.
Illustrating the difference of perspective, his predecessor President Coolidge said of Hoover, “That man has given me nothing but advice, all of it bad.” While Coolidge was unfortunately ignorant of what the Fed was doing with money, he was the last of the genuine free-trade presidents and Hoover the first interventionist. The change in policy was marked by the Wall Street Crash in 1929 and the subsequent years when the slump turned from being a short sharp correction into a prolonged depression.
A new breed of economists evolved with it. From a careerist’s point of view, there was no money nor influence to be gained in being a non-interventionist when your paymaster and the paymaster for your alma mater is an interventionist government. Classical economists who had argued for sound money and Say’s law were out in the cold. Rather like the climate change movement today, where objective, qualified meteorologists have been side-lined by a mixed bunch of science opportunists, an interventionist movement gained control of the economic agenda.
It was this movement that denounced deflation as the ultimate horror, supposedly brought about by a restrictive gold standard. Money now had to be flexible to manage the economy and avoid a repeat of the depression. Targeting prices, first implemented as a policy in the early 1920s by Benjamin Strong at the Fed, along with full employment have been written in stone as objectives for economic and monetary policies ever since. The consequence is debt has taken over from savings as the driving means of economic advancement. Today, the world has an estimated one quarter of a quadrillion dollars of debt, and we can now see this association of both money and debt creation accelerating both further and faster.
For practical purposes, debt is the other side of money-printing. With welfare-driven governments facing escalating commitments and static tax revenues, deflation appears to have been banished for ever.
Deflation and Humpty Dumpty
To think deflation is a danger at a time of accelerating monetary inflation appears to be preposterous. But Irving Fisher was right in one respect, and that is the cycle of bank credit ending in a tendency for credit to contract is always a problem, leading to regular systemic and banking crises in the manner he described. But today, this is counteracted by aggressive expansion of base money, with this cycle in anticipation of a bank credit crisis. So overall, deflation of aggregate money is simply a myth.
An additional problem is modern economists subscribe to the Humpty Dumpty school of definitions: “When I use a word it means just what I choose it to mean – neither more nor less”. They apply deflation mostly to prices, though correctly applied it is of the quantity of money. Google it, and the former comes up.
The error here is to describe the symptom and not the cause. Prices can fall for a number of reasons, monetary deflation being only one. The other principal causes, which are discussed below, are changes in savings behaviour and the effect of technology and competition.
Sticking with the price definition of deflation raises a further problem due to the immeasurability of changes in the general price level. Econometricians have progressively banished price rises by various means, so little or no inflation is recorded. If the price of a good rises, it is assumed consumers will find cheaper alternatives, so the price rise can be ignored. Technological improvements are the excuse to modify prices to take account of them. According to the US Bureau of Labor Statistics, in the twenty-two years from 1997 to 2019 the index value of a new vehicle rose by only 0.6%, while over the same period the average car price rose from $16,400 to $36,718, an increase of 124%. With tricks like this it is easy to see why independent analysts, such as Shadowstats.com and Chapwood Index estimate annual price inflation to have been running at roughly 10% in recent years while the official CPI rises by a goal-seeking 2%.
With statistical manipulation, official figures could even report price deflation when monetary or price inflation is significant. Unfortunately, it is the official CPI statistics that are accepted as the truth even though they are demonstrably incorrect. A narrative that condemns deflation and uses statistical manipulation permits the government and its licensed banks to use monetary expansion as an increasingly important means of funding and for the replenishment of bank reserves, despite consumers being progressively impoverished through higher prices without compensating increases in income.
Today, empirical evidence is ignored
Sound money, that is to say money which expands and contracts at the public’s bequest and not that of the state and its licensed banks, tends over time to lead to falling prices, not that the general level of prices can actually be measured and should remain no more than an economic concept. The clearest example is found in the extraordinary success of free markets in the nineteenth century, spearheaded by wise government in Britain.
Following the Napoleonic Wars the gold sovereign was introduced in 1817 and became the sheet anchor of Britain’s monetary system. Despite the disruption of cycles of bank credit, demand for them and the Bank of England’s gold substitutes in the form of its note issue was a matter for commerce and the public, crystallised in the 1844 Bank Charter Act. Sound money, with the state’s hands firmly bound by the gold standard, saw a small nation of some 27 million (1851) become the most prosperous and influential on earth by the end of the century in a price-deflationary environment.
Food prices fell. A four-pound loaf of bread, which was the food staple in 1810, cost over a shilling, falling to less than ten pence, or by over 20% by the late 1880s. Proceedings at the Old Bailey recorded that prices of manufactured goods fell significantly, particularly clothing. If hedonics had been applied to these prices, as is the custom today, they would have fallen even more due to the massive improvement in overall living standards and production processes from technological innovation.
The fall in prices was even more remarkable, given the gold discoveries at Sutter’s Mill in California in 1848, Australia in the 1850s and later, and in South Africa in the 1890s. Goldmoney estimates that above-ground gold stocks grew from 4,105 tonnes in 1816, when the Coinage Act declared the new sovereign as the sole standard of value and unlimited legal tender, to 23,685 tonnes at the outbreak of the First World War, an increase of 477%. The Californian gold rush produced a doubling of estimated annual mine output, which then remained generally steady until 1891, after which South African production doubled it again in the 1890s. While it would be an error to assume the only use for gold was monetary, there can be no doubt that the increased availability of gold represented significant potential for monetary inflation in the second half of the century.
Despite an inflation of gold stocks, the greatest economic progress ever recorded was in Britain during a period of continual price deflation. An important reason for this dichotomy was it was up to the public to determine the quantity of monetary gold, not the government, and the public only used what was actually needed for its circumstances.
For much of the time Britain was the only significant country on a gold standard, bimetallism with silver or silver standards predominating elsewhere until about 1870. At the outbreak of the First World War, over 80% of world shipping afloat had been constructed in Britain bearing testament of Britain’s economic prowess. And now we are told to believe deflation is bad for us.
Savings
There are a number of reasons the nineteenth century marked a significant improvement in economic conditions and living standards. Tax was low. The Income tax Act of 1842 reintroduced it at 2.9% on annual incomes over £150, equivalent today to about £50,000 measured by gold sovereigns. Ordinary people were permitted to accumulate wealth. But probably the most obvious consideration influencing future prices was an accumulation of savings.
Compared with today’s debt-driven economies, which are fuelled by monetary expansion and government intervention, the savings-driven economies of the nineteenth century required borrowers to bid up for investment capital from savers. Even if he managed to obtain loans for investment and working capital, a borrower with a poor business reputation would end up paying a high interest rate, putting himself at a competitive disadvantage.
Consequently, in a savings-driven culture a debtor’s behaviour of necessity becomes considerably more responsible towards savers’ funds than when debt is available through monetary inflation. Being funded through savings, industrial investment proceeded on the basis that borrowings must be repaid. A knowledge that the purchasing power of gold could rise over time was a further incentive to repay borrowed capital as quickly as possible. Mr Micawber’s Dickensian aphorism about spending within one’s means to avoid misery certainly applied.
Savings had two primary influences on prices. To the extent that they were immediate consumption withheld, in increase in savings lowered potential demand for consumer goods, thereby reducing the general level of prices compared with that at a lower savings rate. Furthermore, savings were the feedstock for industrial and business investment, which improved quality and reduced unit costs.
Despite the inflation of above-ground gold stocks and therefore the availability of gold sovereigns and gold substitutes, the fact that prices fell is testament to the power of an unfettered free market economy to deliver benefits to the general public. It required a benign government strictly limiting its own drain on free markets to appreciate their importance, and nineteenth-century Britain had this in spades.
Britain’s pro-competitive government
Rather than record the entire economic history of the nineteenth century, it is sufficient to focus briefly on the principal actions of two prime ministers, Lord Liverpool and Robert Peel.
Lord Liverpool (1770-1828) navigated Britain back onto the gold standard in 1821, following its suspension during the Napoleonic Wars. At the time of the decisive parliamentary debate in May 1819, money in circulation consisted of almost entirely paper, which before the war in 1792 (five years before the gold standard was suspended in 1797) consisted of £30 million in gold and £20 million in paper. In 1819, despite trade having almost quadrupled it was still £50 million. While more efficient settlement systems and an increased use of discounted bills allowed money to circulate with greater ease, gold had virtually disappeared as circulating money, because as well as its inconvenience for settling trade gold had developed a premium in its value, driving it from circulation.
As Prime Minister, Liverpool oversaw the return from this situation to the pre-war gold standard. He was motivated by three considerations. First, while monetary inflation had enabled the government to finance the war, it could not be a permanent part of the economic system, the need for inflationary financing having passed. Second, the management of the currency should remain with the Bank of England, because it was not a matter to be entrusted to Parliament. And third, with gold having fallen from a 30% premium to paper to only 3%, it appeared eminently possible, if gradually done.
It would require a deflation of paper notes relative to gold to get the old standard to stick. The return to gold having been agreed is attributed to a decline in prices between 1819 and 1821. A six-month recession was recorded in 1819, commencing at the time of the parliamentary debate. But it is a mistake to attribute these conditions entirely to a return to the pre-1797 gold standard when the preceding post-war euphoria is taken into account, which lead to a brief boom. Whether these events or Liverpool’s policies are the reason, the reintroduction of the pre-1797 gold standard provided a background of monetary stability that lasted over ninety years.
Robert Peel was important in two respects. He oversaw the introduction of the Bank Charter Act, which reformed the banking system so that the note issue became the preserve of the Bank of England, which would only be expanded with the full backing of physical gold. While the Act was designed to reinforce the gold standard, sadly it neglected to address the issue of unbacked bank credit.
His second act, the repeal of the Corn Laws in 1846 led by 1860 to the repeal of nearly all other tariffs, producing substantial economic benefits. It meant lower prices for food staples, giving factory workers, who previously had more or less only subsistence-level wages, free money to buy other things. In turn, this led to an expansion of manufacturing activity, lowering production costs even further. The abolition of tariffs was so successful that other countries, such as France, and the German-speaking states on the Continent followed suit.
The reintroduction of the gold standard in 1821 and the Bank Charter Act were designed to remove the temptation of inflationary financing from government, in accordance with Lord Liverpool’s policy. Peel’s removal of tariffs led to lower prices for goods. Together, they ensured a general deflation of prices that lasted until the First World War. It was a period of enormous success for Britain and her trading partners, not just in the Commonwealth and colonies, but it stimulated business in America and Europe as well. And all this from economic policies regarded today to be the greatest threat to the global economy.
Conclusion
The evidence from the past is that deflation of prices offers substantial benefits to consumers, businesses and savers. This article has very briefly shown why this is so by drawing on the experience of Britain in the nineteenth century, and there is no reason to believe that a similar deflationary situation would be any different today. Instead, one of the more obvious contemporary deceits which is paraded as a universal truth is that consumers benefit from higher prices because of the stimulant to business.
On every level this is plainly wrong. The inflationist argument has demolished both savings and personal wealth, leaving the average consumer worse off. It transfers wealth from producers to non-producers, notably the government, its licensed banks and speculators. The fact of the matter is inflationists seek to justify inflationism.
Today’s inflationism has its roots in the ebb and flow of bank credit, a problem unfortunately not addressed by the Bank Charter Act of 1844. More than any other error it led through successive credit cycles to the development of central banks and their attainment of the levers of monetary policy. It required the denial of classical economic theory and its replacement by a new breed of macroeconomist educated to justify the state’s increasing management of money and credit. In the process, reasoned economic theory was discarded in favour of the socialisation of money, and much else besides. Deflation had to be vilified to justify this new macroeconomic world.
It has led to our current situation, where without further monetary inflation governments would have to deliberately rescind most of the welfare provisions introduced since President Hoover became the first interventionist in 1929. Without further monetary inflation, the global banking system would face liquidity pressures likely to collapse it: in fact, these strains have already appeared in the US monetary system, forcing the Fed to inject large amounts of liquidity on a daily basis through repurchase agreements.
Without further monetary inflation, interest rates will immediately rise, bankrupting indebted businesses and consumers alike, who have become used to easy money never to be repaid.
All that further inflation achieves is to defer these outcomes, not stop them. There can only be one outcome from this macroeconomic fairyland, the collapse of unbacked fiat currencies. A return to sound money, free markets and prices set by the deployment of genuine savings will require shifts of seismic proportions.
A proper respect for the benefits of falling prices might have avoided the looming monetary and economic crisis.
Tyler Durden
Tue, 02/04/2020 – 19:25 - Brian Stelter Crowned King Of 'Liberal Hack' Tournament
Brian Stelter Crowned King Of ‘Liberal Hack’ Tournament
CNN talking head Brian Stelter took first place in a “Liberal Hack” tournament that pitted the left’s most rabid media conspiracy theorists against each other in a ‘March Madness-style’ competition.
VOTING BEGINS NOW FOR THE CHAMPIONSHIP MATCH OF THE FIRST ANNUAL SMUG INDUSTRIES LIBERAL HACK TOURNAMENT
(1) @brianstelter
vs
(2) @JRubinBlogger
— Comfortably Smug (@ComfortablySmug) February 3, 2020
https://platform.twitter.com/widgets.js
Announced on Jan 23. by Twitter influencer Shashank Tripathi – known as ‘Comfortably Smug‘ – the contest featured 64 liberal journalists from MSM outlets such as the Washington Post, CNN and MSNBC.
Stelter ‘beat’ the Washington Post’s Jennifer Rubin – whose ‘hackiness’ can be appreciated in the below example.
Presented without comment pic.twitter.com/gwRRR5engT
— Josh Hammer (@josh_hammer) February 4, 2020
The contest was in doubt on Monday, after Twitter temporarily suspended Tripathi for violating their rules on “abuse and harassment,” after tweeting “Where’s Hunter, fat???” right before the Iowa caucuses.
Smh the Biden campaign got Smug locked up until the Iowa caucuses start tonight pic.twitter.com/POjfjCdDfy
— SmugIndustries (@SmugIndustries) February 3, 2020
Tyler Durden
Tue, 02/04/2020 – 19:05 - Japan Confirms 10 nCoV Cases Aboard Quarantined Cruise Ship; Hong Kong Warns Virus Could "Spread Widely" As Deaths Near 500: Virus Updates
Japan Confirms 10 nCoV Cases Aboard Quarantined Cruise Ship; Hong Kong Warns Virus Could “Spread Widely” As Deaths Near 500: Virus Updates
Summary:
- Global confirmed deaths: 492
- Confirmed cases on mainland: 24,324; additional 172 in ROW
- 185,555 cases under medical observation
- Chinese authorities have enforced full community lockdown in Nanjing Province
- American Airlines, Cathay Pacific and Jetstar close routes to China
- Taiwan tightens travel restrictions
- WHO infectious hazard chief says outbreak ‘not a pandemic’
- Japan confirms at least 10 cases of coronavirus aboard “Diamond Princess”
- Kudlow says impact on US economy from outbreak will be ‘limited’
* * *
Update (1845ET): At least 10 cases of coronavirus have been discovered aboard the Carnival Japan cruise ship “the Diamond Princess”, which has been quarantined at Japan’s Yokohama port since yesterday after officials learned that a passenger who recently disembarked tested positive for the virus in Hong Kong.
JUST IN: More than 10 people aboard a Japanese cruise liner have tested positive for #coronavirus, Japan’s @tbs_news reported, after all 3,000+ passengers were quarantined earlier Tuesday pic.twitter.com/I6Z4iqIMEB
— QuickTake by Bloomberg (@QuickTake) February 4, 2020
As we reported earlier, 3,000+ passengers aboard the cruise ship are under quarantine. It’s unclear when they’ll be allowed to leave the ship. All individuals who were found to be infected with the virus were taken to a local hospital for treatment.
Meanwhile, after unveiling the city’s first virus-related death, Hong Kong health officials warned Tuesday that the coronavirus outbreak could “spread widely through Hong Kong.” Three newly diagnosed cases raised the total number diagnosed in the city to 18, with at least four of those cases being confirmed human-to-human transmissions, according to SCMP.
“It is highly probable the four were infected locally, so there could be invisible chains of infection happening within communities,” Chuang said. “We are not ruling out a large spread [of the virus] in the future.”
In other news, South Korea just confirmed 2 more cases, raising the country’s total to 18 (the same as Hong Kong).
And for the second time in as many hours, health officials on the mainland updated the tally of confirmed cases.
- NEWLY CONFIRMED CORONAVIRUS CASES ON MAINLAND AT 3,887 ON FEB 4
- MAINLAND CHINA REPORTS 65 NEW CORONAVIRUS DEATHS ON FEB 4
- CHINA’S TOTAL NUMBER OF CONFIRMED CORONAVIRUS CASES ON MAINLAND HITS 24,324 AS OF END-FEB 4
- CHINA’S TOTAL NUMBER OF CORONAVIRUS DEATHS ON MAINLAND REACHES 490 AS OF END-FEB 4
Additionally, according to China’s NHC, 185,555 cases under medical observation, up from 171,329 yesterday. Meanwhile, 892 cases have been cured. After Tuesday’s rally in US stocks, will this number be all that bulls need to drive this massive short-squeeze even further?
Here’s the SCMP’s latest roundup of coronavirus cases (it has yet to be updated to reflect the new cases):
More than 5,000 health care workers walked off the job on Tuesday, worsening what’s becoming a serious public health crisis, as they pressure the city government to close all borders with the mainland. Health officials warned that newborns and the elderly are still at risk.
Back in Wuhan, the entire city remains on lockdown, with streets eerily empty aside from a handful of pedestrians. The New York Times just published a video of sweeping drone footage of the city, which is the epicenter of the virus and by far the hardest hit.
As for the cruise ship, it’s just the latest example of public officials underestimating the sheer infectious capacity of the coronavirus.
* * *
Update (1715ET): The latest data release from China’s Hubei Province shows yet another huge surge in cases and deaths.
-
3156 new pneumonia cases of new coronavirus infection were added in Hubei Province (making a total of 16,678 in Hubei).
-
There were 65 new deaths in the province, making a total of 479.
-
At present, 12627 cases are still being treated in the hospital , of which 1809 cases are critically ill.
-
66,764 people are still undergoing medical observation.
The full China data will be available shortly.
* * *
Update (1145ET): In a stunning announcement by officials in Nanjing Province, authorities have unveiled what amounts to full martial law and furthermore, taking enforcement of reporting the sick extremely seriously:
“Nanjing issued a notice to further strengthen community management during epidemic prevention and control: fully implemented community closed management, all people entering and leaving the community must wear masks. Strict inspection and registration of vehicle personnel in the community.
Strengthen community environmental governance and management of rental housing. If an outbreak occurs in a rented house without a timely report, the leasing unit or individual of the house will be held accountable according to law.”
Nanjing is home to 8.35 million people – this has to be the largest enforcement of martial law in history.
* * *
Update (0900ET): After saying the viral outbreak would have ‘no impact’ on the US economy last week, White House economic advisor Larry Kudlow has now revised that view.
The coronavirus outbreak will likely have some impact on the supply chains of American companies, but the impact probably won’t be catastrophic, Kudlow told Maria Bartiromo during an interview with Fox Business Network.
“It’s not a catastrophe. It’s not a disaster,” Kudlow said, adding later: “We’ve been through this before and I just think the impact is minimal.”
However, Kudlow added that it might take longer for China to fulfill some of its promises from the ‘Phase One’ trade deal (specifically, their promise to buy an additional $200 billion in American-made goods).
Impact of #CoronavirusOutbreak from @larry_kudlow “prob it will be .2% in 1Q, another .2% later in the year. It’s not a disaster. Minimal impact”. @MorningsMaria @FoxBusiness “we are reducing inequality. Yes export boom will take longer but #USMCA will unlock gains”
— Maria Bartiromo (@MariaBartiromo) February 4, 2020
“We will not fine tune the economy bc of #CoronavirusOutbreak this Is a blue collar boom” – @larry_kudlow @WhiteHouse “if it aint broke, don’t fix it” kudlow calls for .2% bite in 1Q., another .2% impact later in the year @MorningsMaria @FoxBusiness
— Maria Bartiromo (@MariaBartiromo) February 4, 2020
We’d be curious to know: What does Wilbur think about this?
* * *
No new coronavirus-related deaths were announced overnight, leaving the global fatality toll at 427, with all but two of those deaths occurring in China, according to the South China Morning Post. The total number of confirmed cases is closing in on 21,000, as nearly 200,000 are ‘under observation’ in China.
Yesterday, President Xi convened a second meeting of the Politburo Standing Committee, China’s highest governing body. The public meeting marked Xi’s second appearance before the Chinese people since the coronavirus outbreak. According to reports in Chinee state media, Xi declared the outbreak “a major test of China’s system and capacity for governance and we must sum up the experience and draw a lesson from it,” while declaring the outbreak a threat to societal stability. As we reported yesterday, Xi also warned local officials that they would be punished if they failed to suppress the virus, or if they slowed down the government’s efforts to fight the virus for the sake of “formalities” and “bureaucratism,” according to the New York Times.
Already, more than 400 local officials have already officially punished for dereliction of duty, despite complaints from some (including the Mayor of Wuhan) that Beijing tied their hands.
China’s financial ‘support’ of the WHO continued to pay off on Tuesday as the head of WHO’s Global Infectious Hazard Preparedness division said that the nCoV outbreak doesn’t yet constitute a global “pandemic” – directly contradicting the organization’s declaration.
VIDEO: The head of WHO’s Global Infectious Hazard Preparedness division says that the outbreak of the deadly novel #coronavirus, which has spread from China to two dozen countries, does not yet constitute a “pandemic” pic.twitter.com/YKuEh5IEbN
— AFP news agency (@AFP) February 4, 2020
As the world grows increasingly skeptical of the numbers and information coming out of China, Beijing’s NHC said Tuesday that the coronavirus mortality rate would drop further as soon as “suitable treatments” are implemented in Wuhan. What kind of treatments are they talking about? Well, as we’ve repeatedly pointed out, nCoV responds to a cocktail of AIDS drugs (sometimes augmented with typical flu treatments). Some scientists have highlighted certain similarities between HIV and nCoV.
NHC Deputy Director Jiao Yahui said the national fatality rate was just 2.1%, with the vast majority of deaths in Hubei province. Some scientists have projected that the real death rate might be closer to 11%.
Especially after Hong Kong suffered its first confirmed fatality due to the coronavirus, marking only the second death from the outbreak outside China. The dead man traveled by train to Wuhan on Jan. 21 before returning to Hong Kong two days later.
Macau, the only place in China where casino gambling is legal, shut down its casinos for at least the first half of February.
Though some other provinces are catching up, Hubei remains by far the hardest-hit of China’s 31 provinces. The central Chinese province has lost 414 people, or 97% of the mainland death toll and the mortality rate in Wuhan, the provincial capital, has reached 4.9%, with 313 deaths so far. The mortality rate for Hubei as a whole is 3.1%, the highest of any province in the country.
Outside China, 6 new cases were confirmed in Thailand overnight, along with 6 new cases in Singapore (4 human-to- human), a first case in Belgium and the revelation about 105 suspected cases in Philippines, up 25 since Monday. Anti-Chinese sentiment in the Philippines has crested since the outbreak reached its shores, with the president even threatening to deport Chinese travelers and residents en masse.
Since our last check-in, airlines have suspended more routes to China. At least two more Asian airlines – Hong Kong’s Cathay Pacific and Japan’s Jetstar – suspended routes to China on Tuesday, joining dozens of other airlines, including almost all of the major American carriers, in suspending passenger travel as demand plummets. Domestic airlines, meanwhile, have been asked by the Party not to cut international flights. American Airlines suspended flights to Hong Kong from Dallas and Los Angeles through Feb. 20.
#China asks domestic airlines not to cut international flights, aviation authority says on social media. Requests when Chinese airlines cancel a portion of flights due to lower market demand they ensure they continue to operate to countries where flights are allowed. #Wuhanvirus
— Eunice Yoon (@onlyyoontv) February 4, 2020
Taiwan will ban foreigners who have visited or have been living on the mainland over the past 14 days from entering the island, effective Friday. The ban won’t apply to foreigners living in Hong Kong or Macau. On Tuesday, Taiwan’s coastguard stepped up patrols around the resort island of Penghun to stop Chinese fishing boats from “intruding” into Taiwanese territory (and possibly carrying Chinese desperate to avoid quarantine), the SCMP reports.
The decision to tighten restrictions on travelers from the mainland comes after its government condemned Beijing for blocking Taipei from joining the WHO’s anti-epidemic network, which would have allowed Taiwan to access first-hand information about the virus and any suppression efforts that are actually working.
Australia is the latest country to evacuate citizens from Wuhan. Like Japan, the US and the UK, it has forced those rescued into a two-week quarantine.
Japan has quarantined around 3,700 people aboard a cruise ship off the port city of Yokohama after a passenger who departed the cruise at an earlier date tested positive for coronavirus. So far, officials say they haven’t detected any cases of the virus aboard the ship, but tests are ongoing.
VIDEO: 🇯🇵 Japan has quarantined a cruise ship carrying 3,711 people and was testing those on board for the new #coronavirus on Tuesday after a former passenger was diagnosed with the illness in Hong Kong #DiamondPrincess pic.twitter.com/1S1s8MRKd9
— AFP news agency (@AFP) February 4, 2020
According to the Chinese press, a similar scenario is playing out at a mainland port (marking at least the third quarantine of a cruise ship since the beginning of the outbreak).
【曾搭载确诊病例的邮轮停靠高雄港 旅客被拒下船】
“世界梦号”游轮曾于1月19日从广州南沙码头载客前往越南，1月24日返回广州，船上有三人下船后确诊为武汉肺炎。这艘游轮4日停泊在高雄港，基于疫情的缘故船上的游客不能下船，邮轮在下午已经驶离高雄港。 pic.twitter.com/auKbVLnmva— 自由亚洲电台 (@RFA_Chinese) February 4, 2020
Chinese press has also reported on cases where individuals resisted a mandatory quarantine. This is a warning to the population as much as anything.
【江苏昆山居民拒绝隔离】
【被工作人员强行带走】网上流传片段，一批穿着“昆山市治理”防护服的人员，到一户人家劝住户准备行装接受隔离，但户主拒绝合作。工作人员于是入屋把住户逐个抬走送上救护车
男户主质疑工作人员违法并激烈反抗，期间抓破工作人员的防护服，又企图躲进车底 pic.twitter.com/ce1JbpiJkC
— 自由亚洲电台 (@RFA_Chinese) February 4, 2020
As we’ve repeatedly reported, signs are emerging that a combination therapy involving cocktails of drugs meant for different ailments may be effective in combating the coronavirus outbreak around the world, with different hospitals from Bangkok to Zhejiang reporting cases of patients recovering from the disease, according to SCMP.
Tyler Durden
Tue, 02/04/2020 – 18:58 - US Government Wants To Ban Encryption In The Name Of Protecting Children
US Government Wants To Ban Encryption In The Name Of Protecting Children
Authored by Aaron Kesel via TheMindUnleashed.com,
In the name of protecting the children, U.S. lawmakers and the Department of Justice want to ban end-to-end encryption, opening Internet users to a host of attacks on their privacy by not only the government but also malicious hackers.
Attorney General William Barr is claiming he wants to protect the children but his former law firm, Kirkland & Ellis, protected Jeffrey Epstein—one of the most serial child sex traffickers. And it turns out Barr’s own father, Donald Barr, was the headmaster of an elite New York City school that hired college dropout Epstein to teach math and physics.
Last week, Barr expressed at the White House Summit on Human Trafficking that encryption was aiding human traffickers. He said:
“We live in a digital age, and like everyone else, human traffickers are relying increasingly on digital communication and the Internet … and more and more, the evidence we rely on to detect and to deal with these predators is digital evidence,” Barr said. “However, increasingly, this evidence is being encrypted.
We all recognize that encryption is important in the commercial world to protect consumers like us from cybercriminals, but now, we’re seeing military-grade encryption being marketed on consumer products like cellphones and social media platforms and messaging services, and that means that we cannot get access to this data.
We just can’t have chatrooms and websites that are involved in grooming children victims or selling trafficked women — sites that are impenetrable to law enforcement—and we have to do something about this.”
Barr has previously said that technology companies using end-to-end advanced encryption and other security measures are effectively turning devices into “law-free zones.”
“As we use encryption to improve cybersecurity, we must ensure that we retain society’s ability to gain lawful access to data and communications when needed to respond to criminal activity,” Barr said in his keynote address at the International Conference on Cybersecurity at Fordham University Law School in Manhattan.
“Encryption reliably protects consumers’ sensitive data,” Brett Max Kaufman, a senior staff lawyer in the Center for Democracy at the American Civil Liberties Union said. He added,
“There is no way to give the F.B.I. access to encrypted communications without giving the same access to every government on the planet. Technology providers should continue to make their products as safe as possible and resist pressure from all governments to undermine the security of the tools they offer.”
Now Congress is seeking to ban companies from using end-to-end encryption and impose penalties for businesses that use it. Barr, Sen. Lindsey Graham (R-SC), and Sen. Senator Richard Blumenthal (D-CT) are targeting encryption with a new draft bill called the “Eliminating Abusive and Rampant Neglect of Interactive Technologies (or EARN IT) Act.” The act would modify the Communications Decency Act’s Section 230 to make companies liable in state criminal cases and civil lawsuits over child abuse and exploitation if they don’t follow practices set by a national commission according to Engadget.
That commission would be known as the “National Commission on Online Child Exploitation Prevention,” would be comprised of 15 people, and led by the Attorney General who just so happens to be Barr himself. This new government organization would also include the Chairman of the Federal Trade Commission, the Secretary of Homeland Security, and 12 others handpicked by members of Congress. The Commission would be tasked with recommending “best practices for providers of interactive computer services regarding the prevention of online child exploitation conduct.”
Riana Pfefferkorn, a member of the Stanford Law School’s Center for Internet and Society, wrote in a blog post that the bill threatens the constitutional rights of online communication platforms and their users in a solid evaluation of the bill. Pfefferkorn explained:
“While the EARN IT Act is ostensibly aimed at Section 230, it’s actually a sneaky way of affecting [encryption laws] without directly amending it. This bill has a number of extremely serious problems, too many to fit into one blog post. It is potentially unconstitutional under the First, Fourth, and Fifth Amendments, for one thing.”
If passed the law would also require companies like Telegram to allow backdoor government access to encrypted information which would also provide a “golden key” vulnerability for malicious hackers—something that Barr doesn’t appear to understand.
The EFF wrote:
“Throughout his term as Attorney General, William Barr has frequently and vocally demanded “lawful access” to encrypted communications, ignoring the bedrock technical consensus that it is impossible to build a backdoor that is only available to law enforcement. Barr is far from the first administration official to make impossible demands of encryption providers: he joins a long history of government officials from both parties demanding that encryption providers compromise their users’ security.”
Even government officials in the FBI and DOJ aren’t convinced Barr is doing the right thing by seeking to ban encryption, according to the Wall Street Journal.
In 2018, the FBI lied and inflated the number of encrypted phones it said were connected to ongoing criminal investigations. The Bureau incorrectly stated time and time again that 7,800 phones were blocked from investigators. The Washington Post later reported that those figures were more like 1,000 to 2,000. The FBI blamed a “programming error” for the discrepancy.
Modern law provides enough legal means making EARN IT an unnecessary escalation on Section 230 which protects small companies more than the big giants. Currently, if an Internet company finds that an individual or group is using its platform to distribute child sexual abuse material, federal law already requires them to provide that information to the National Center for Missing and Exploited Children and to cooperate with law enforcement investigations.
Tyler Durden
Tue, 02/04/2020 – 18:45
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